Fund Closes: Madison Closes Fund, Expands Staff –

Madison Investment Partners recently held a first close of $30 million on its second fund, Madison Investment Partners II LP, which has a target of $90 million.

Susan Goodrich, managing director at Madison Investment, said fund raising began in the Fall of 1998. The fund will focus on investments in small middle-market manufacturing, distribution and service businesses. She also said that three deals have been made with Fund II’s capital including a $500,000 minority investment in FiberNet Telecom Group, a company that provides commercial “last mile” connections to commercial buildings like the Chrysler Building, a $2 million investment in AMI Telecom, and a $2 million investment in Califone International Holdings Inc..

Investors involved include Provident Capital Corp. and several wealthy individuals.

Madison Investment’s held a final close on its debut fund, Gull Rock LP, in November 1997 at $8 million.

Goodrich said that the fund will be closing on two more investments within the next month. “When you are dong the number of deals that we are doing, you really need additional strength to work on the deals as they come in,” she said.

The “additional strength” will come in the form of Peter Yearley, who in December was appointed vice president by Madison Investment. Prior to joining Madison Investment, Yearley was an executive director at Warburg Dillon LLC/UBS AG.

“I’m very excited about the opportunity and I think that Madison Investment presents a very unique platform to invest in a very attractive market segment,” Yearley said. “There is still value to be derived in the small middle market and some very interesting opportunities for returns.”

In his new capacity, Yearley will be involved in due diligence of investment opportunities, bank financing, and deal sourcing. “My hope is to personally close four to five deals this year,” Yearley said.

Madison Investment was founded in 1993 and invests in management buyouts, expansion financings, and later-stage venture rounds.