Greyrock Capital Group, a middle-market investment firm with offices in San Francisco, Chicago and Westport, Conn., has closed its first fund with $190 million in limited partner commitments.
The Greyrock investment strategy is to make equity and mezzanine debt investments of between $3 million and $15 million into companies with EBITDA of $10 million and up. Such infusions can be part of buyouts, recaps or internal growth financings, and cover all industries except for information technology, biotech, growth retail or restaurants.
“We tend to be a bit better at doing complicated deals,” says Mark French, a Greyrock principal. “We also can do smaller deals, which can be a significant hurdle for most of the folks out there.”
If the firm name sounds familiar, you probably were a private equity player in the mid-1990s. Greyrock’s initial incarnation came in November 1994, when Nations Financial Capital Corp. – a wholly owned subsidiary of NationsBank – changed its name to Greyrock Capital Corp. The modification was purely cosmetic, as was its subsequent name change to NationsCredit Commercial Corp. in January 1996. Two years later, Bank of America acquired NationsBank, and the group was incorporated into Bank of America Commercial Finance.
Bank of America, however, became disenchanted with the leveraged lending space by the end of 2000. A sextet of investors – including five onetime Greyrock pros – splintered off to launch their own firm, and formally emerged in 2002 as Greyrock Capital Group.
Greyrock held a first close on its fund in early 2003, with New York-based Reservoir Capital Group as its cornerstone investor. The $190 million final close – which includes SBIC matching funds – occurred in February. FleetBoston Financial Corp. also invested in the fund, which is notable because Bank of America recently acquired it.
French says that Greyrock has employed about 40% of its fund capital. He is joined by firm managing partners Ken MacArtney and Mark Shufro, plus firm partners Stephen Etter, Todd Osburn and Tracy Perkins.
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