Ironwood Holds First Close on Second Mezz Fund

Firm: Ironwood Capital Advisors

Fund: Ironwood Mezzanine Fund II

Target: $150 million (including SBIC money)

Amount Raised: $31 million

Ironwood Capital Advisors has held a first closing of $31 million on its second mezzanine and equity fund, Ironwood Mezzanine Fund II, more than half way to its $50 million target for capital raised from private investors. The firm plans to borrow another $100 million as part of the government’s Small Business Investment Company program.

According to President Marc Reich, the eight limited partners in the first closing are Axa Equitable; CUNA Mutual; Farmington Savings Bank; HSBC; Ing; Phoenix Insurance; St. Paul Travelers; and TD Bank North.

The firm intends to close on an additional $8 million to $10 million from private investors by February, said Reich, who was hopeful of reaching the $50 million target within the next 90 days. Of several other investors lined up, one is an insurance company, two are banks, and “we’ll probably throw another one in there as well,” said Reich.“We’ll probably end up with 15 investors in total.”

Ironwood Capital plans to take non-controlling stakes in 22 to 25 portfolio companies with the new fund; expect two-thirds of those to be buyout deals, and the rest growth capital financings. Favored industries include manufacturing, business services, consumer products, and health care products and services. The firm closed its first mezzanine fund, also with SBIC funding, with $83 million.

Ironwood’s funds have a 10-year life, with the first five years as the investment stage and the second five as the harvesting stage.—E.B.