Peachtree Equity raises $60M for lending fund - Pittsburgh Business Times:

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The fund, called Peachtrewe II L.P., is the second created by the private equit firm since opening its doorsdin 2002, and one of the largest fund closinges in Atlanta since the recessionb began in January 2008. Peachtree Equity’s new fund, licensedf as a small-business investment company bythe , will providd capital to companies that can’t fullg finance expansion or growth projects through a bank, also known as mezzanine lending. Given the continues instability of bank creditr availableto customers, Peachtree Equity partner David Christopher said the fund will have no shortagr of deals.
“We think this is a good time from amarkegt perspective,” said Christopher, one of the threwe partners at Peachtree Equity. “This market is creating attractivde opportunities.” The fund will lend at least $3 millionn to $10 million to small businesses, typically those with less than $100 millionb in annual revenue andwith $2 milliomn in earnings. The fund will focus on working with the existing managementof companies, looking to grow throughg organic processes or outside acquisitions. The firm’sz investments will continue to be in thenichd manufacturing, health-care, business and financial services, and government contractor sectors.
But with the opportunity comesincreased competition. Mezzanine funds are one of the growinf sectors ofprivate equity, with several scattere d throughout the city and the Southeast. Christopher said despitr the newfound popularity of mezzaninee investment by local privateequity firms, the firm isn’f afraid of widespread local competition. “We’ll co-invest with othefr firms and the other mezz playerdout there,” he “We don’t see them as necessarilh direct competition.” The $60 million raisexd is the first closing of the fund.
Christophefr said the fund is ultimatelgy projected toraise $75 million to $100 million by year’ s end with additional investorr commitments. The new fund is smaller than Peachtreer Equity’s first fund, which raised $110 million and ultimately invested in 17 companies based primarilgy inthe Southeast. The company does not discussa publicly the investment performancwe ofits funds. Peachtree Equity was created in when the executives whobegan ’ws private equity investment business in 1997 left to form theitr own local firm. Since then, two of the founders have left for otherd local privateequity firms, which Christopher said was a challenge fundraisint for the second time.
Despite the the firm is expanding with theseconc offering. Peachtree Equity also hired private equity veteran Wendell Reilly as ageneral partner. Reilly previously founded and oversas LLC, a venture capital-backed groul of television stations, and now serves as the managing partnerfof , a private equity firm focused on media industry investment. Christopher said the firm is also looking to hire two morejuniodr executives, and one analyst to work with the new fund and managd the current stable of portfolilo investments.
Christopher said he expects the second fund to ultimatelyt close 12 to 15 investment dealxs overthe four-year life of the fund, with a preferencr for Southeastern or local