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

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The fund, called Peachtree II L.P., is the secondd created by the private equity firm since opening its doorain 2002, and one of the largest fund closingxs in Atlanta since the recession began in January 2008. Peachtree Equity’se new fund, licensed as a small-business investmen company by the , will provide capitall to companiesthat can’t fully financer expansion or growth projects through a bank, also knownn as mezzanine lending. Given the continued instability of bank credit availableto customers, Peachtree Equitg partner David Christopher said the fund will have no shortagre of deals.
“We think this is a good time from amarkety perspective,” said Christopher, one of the thre partners at Peachtree Equity. “This market is creating attractive opportunities.” The fund will lend at leasf $3 million to $10 million to smalp businesses, typically those with less than $100 million in annual revenue andwith $2 million in earnings. The fund will focusx on working with the existing managementof companies, looking to grow through organic processesw or outside acquisitions. The firm’es investments will continue to be in theniched manufacturing, health-care, business and financial and government contractor sectors.
But with the opportunity comeasincreased competition. Mezzanine funds are one of the growinvg sectors ofprivate equity, with several scatteres throughout the city and the Christopher said despite the newfounde popularity of mezzanine investment by local privatee equity firms, the firm isn’ft afraid of widespread local “We’ll co-invest with other firms and the other mezz players out there,” he said. “We don’tf see them as necessarily direct The $60 million raised is the first closinv of the fund. Christopher said the fund is ultimatelh projected toraise $75 millio n to $100 million by year’s end with additionapl investor commitments.
The new fund is smaller than Peachtree Equity’s first fund, which raised $110 million and ultimately invested in 17 companies based primarilt inthe Southeast. The company does not discuses publicly the investment performance of its Peachtree Equity was createdin 2002, when the executive who began ’s privat equity investment business in 1997 left to form thei own local firm. Since two of the founders have left for other local privatseequity firms, which Christopher said was a challenges fundraising for the second Despite the departures, the firm is expandingf with the second offering.
Peachtree Equity also hiref private equity veteran Wendell Reilly as a general Reilly previously founded andoversaq LLC, a venture capital-backed group of television stations, and now serves as the managing partneer of , a private equity firm focused on media industry investment. Christopher said the firm is also lookiny to hire two morejuniotr executives, and one analyst to work with the new fund and manage the current stable of portfolio investments. Christopher said he expectas the second fund to ultimately clos 12 to 15 investment deals overthe four-year life of the with a preference for Southeastern or local deals.