Comvest Raises $580 Million Earmarked For Turnarounds

The Comvest Group has closed its latest fund at $580 million, handily ahead of the $500 million target that the West Palm Beach, Fla., firm had set for Comvest Investment Partners IV.

“It is a tough market,” said Louis Colosimo, a partner at Comvest who is responsible for marketing, fund raising and client service. “It’s certainly better than it was a couple of years ago.” Institutional investors seem receptive to making new investments with fund managers that have good track records, he said.

Although Comvest has been investing since 1988, mostly in struggling lower mid-market companies, the firm began taking outside investors only with its third fund, a $445 million pool that closed in 2007, Colosimo said. Fund III is fully invested and about half harvested, he said. Performance statistics were not available.

The firm typically seeks to invest $5 million to $70 million of equity per transaction in companies that generate $15 million to $750 million of revenue, according to the firm’s Web site. “Our objective is to find good solid companies that have stumbled financially and especially operationally,” Colosimo said. In addition to its control-oriented buyout funds, the firm launched a debt investment strategy in 2006 to focus on healthy, growing companies in the same size range. The firm has about 20 investment pros, 15 on the equity side and five focused on debt.

The firm is industry agnostic, but focuses primarily on health care, transportation, and software and technology. Having both equity and debt capabilities gives the firm a lot of flexibility in the deals it pursues, Colosimo said. “We’ll use pretty much any structure that makes sense,” he said. “No two structures of ours look identical.”

Case in point, the firm announced in October that it had provided $20 million in debt financing to Merchant Cash and Capital LLC, a New York-based lender that advances cash to businesses based on their future credit card revenues. The funding will allow Merchant to expand its business, creating new programs, the firm said in its announcement.

Comvest has begun investing out of Fund IV. The firm announced in June that it had completed a control investment in GroundLink, a New York company whose technology allows customers to make ground travel reservations throughout the United States and 172 countries using a network of 45,000 taxis, car service, limousines, shuttles and vans.

Since 1988, Comvest has invested more than $2 billion of capital in over 200 public and private companies.