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Centerfield Capital raises $171m for lower mid-market mezzanine fund

21 May 2013

Lower mid-market focused mezzanine investor Centerfield Capital Partners has closed its third fund, Centerfield Capital Partners III, on over $171m.

Commitments to the fund exceeded Centerfield’s $150m target and represent approximately a 50 per cent increase in the amount of capital committed to Centerfield’s second fund.

Like its predecessor funds, Centerfield III will invest a combination of subordinated debt and equity.

“Our firm provides capital to businesses generating $15m to $100m in revenue. Our goal is to invest approximately two-thirds of our capital in high coupon subordinated debt and one third in equity,” said Tom Hiatt, founding partner of the firm. “Typically, we invest between $4m and $12m in each transaction, although we have the capacity to arrange up to $30m in financing with participation from our institutional limited partners.”

“Regardless of fluctuations in the economic environment, we maintain a disciplined approach to investing,” added Scott Lutzke, founding partner. “We back companies with a history of growth and profitability which are led by strong management teams. Conservative valuations are also a critical element to our strategy. We are cautious in the amount of leverage we use to finance our portfolio companies, and believe this discipline has been instrumental to our success.”

Investors in Centerfield III include pension funds, fund of funds, global and regional banks, insurance companies, foundations and high net worth individuals.

The firm has already made eight investments from the new fund.

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