Peachtree Equity raises $60M for lending fund - Business First of Louisville:

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The fund, called Peachtree II is the second created by the privater equity firm since opening its doors in and one of the largestt fund closings in Atlant since the recession began inJanuary 2008. Peachtree Equity’x new fund, licensed as a small-business investment companuy bythe , will provide capital to companies that can’ty fully finance expansion or growthh projects through a bank, also known as mezzaninre lending. Given the continuedx instability of bank credit available to Peachtree Equity partner David Christopher said the fund will have no shortagsof deals.
“We think this is a good time from amarkety perspective,” said Christopher, one of the three partners at Peachtrew Equity. “This market is creating attractived opportunities.” The fund will lend at least $3 millionh to $10 million to small businesses, typically thoses with less than $100 million in annual revenuew andwith $2 million in The fund will focus on working with the existingb management of companies, looking to grow through organic processexs or outside acquisitions. The firm’s investments will continu to be in theniches manufacturing, health-care, business and financial services, and governmentg contractor sectors.
But with the opportunity comesxincreased competition. Mezzanine funds are one of the growing sectors ofprivatee equity, with several scattered throughout the city and the Christopher said despite the newfound popularity of mezzanine investment by local private equity firms, the firm isn’t afraifd of widespread local competition. “We’ll co-invest with other firms and the other mezz playersout there,” he said. “We don’tt see them as necessarily direcft competition.” The $60 million raised is the first closing ofthe fund.
Christopher said the fund is ultimatelgy projected toraise $75 milliom to $100 million by year’as end with additional investor commitments. The new fund is smalletr than Peachtree Equity’s first fund, which raisefd $110 million and ultimately investecd in 17 companies based primarilh inthe Southeast. The company does not discuss publicl the investment performance ofits funds. Peachtre e Equity was created in 2002, when the executivesw who began ’s private equityt investment business in 1997 left to form theitr ownlocal firm. Since then, two of the founders have left for othe local private equity which Christopher said was a challenge fundraising for theseconx time.
Despite the departures, the firm is expandinh with thesecond offering. Peachtreew Equity also hired private equity veterajn Wendell Reilly as ageneral partner. Reilly previouslyu founded andoversaw LLC, a venture capital-backed group of television stations, and now serves as the managing partner of , a private equity firm focuseed on media industry Christopher said the firm is also looking to hire two more juniort executives, and one analyst to work with the new fund and manag e the current stable of portfolio investments.
Christopher said he expect the second fund to ultimatelh close 12 to 15 investment dealzs overthe four-year life of the fund, with a preferenc for Southeastern or local deals.