Mezzanine Firm Targets $225M For Second Fund

Minneapolis-based GMB Mezzanine Capital LP has raised $152.6 million for its sophomore fund, GMB Mezzanine Capital II LP, according to sister data service Thomson One.

The new fund, like its predecessor, is licensed as a small business investment company. The GMB Mezzanine Web site says the first fund invested $205 million in 29 companies. The current fund is targeted at $225 million.

SBICs, which can sell their loans through a Small Business Administration program, typically focus their investments on American companies with fewer than 500 employees. A fund can raise up to $75 million in equity, then take “two tiers” of leverage, in SBA parlance, to achieve their $225 million size.

In February, the fund had a $35.5 million first close, according to a regulatory filing. The firm is likely to remain in the market until the fall, according to a person familiar with the fundraising.

GMB Mezzanine targets companies with total enterprise values under $100 million and with annual revenue of $10 million to $200 million, according to its Web site. The firm’s target investment size is $3 million to $15 million.

Top co-investors include Triangle Capital Corp., Audax Group, MCM Capital Partners LP and Gridiron Capital LLC, according to Thomson One.

GMB Mezzanine declined to comment on the fundraising.