Peachtree Equity raises $60M for lending fund - Puget Sound Business Journal (Seattle):

http://executivetelephony.com/news/article.php?id=88
The fund, called Peachtree II L.P., is the second create by the private equity firm sincd opening its doorsin 2002, and one of the largesr fund closings in Atlanta since the recessiomn began in January 2008. Peachtree Equity’s new licensed as a small-business investment companhy bythe , will provide capitall to companies that can’t fullgy finance expansion or growth projects through a bank, also known as mezzanine lending. Given the continued instability of bank credity availableto customers, Peachtree Equity partner David Christopher said the fund will have no shortage of deals.
“We thinkl this is a good time from a market said Christopher, one of the three partners at Peachtree “This market is creating attractiv e opportunities.” The fund will lend at least $3 millioj to $10 million to small businesses, typicall y those with less than $100 million in annual revenue and with $2 millionm in earnings. The fund will focus on working with the existintg managementof companies, looking to grow throughh organic processes or outside acquisitions. The firm’s investmentsx will continue to be in theniche health-care, business and financial services, and government contractotr sectors. But with the opportunity comesincreased competition.
Mezzanine funds are one of the growingf sectors of private with several scattered throughout the city andthe Southeast. Christophed said despite the newfound popularitg of mezzanine investment by local private equity thefirm isn’t afraid of widespread loca l competition. “We’ll co-invest with other firms and the othe mezz playersout there,” he said. “Wse don’t see them as necessarily direc competition.” The $60 million raisex is the first closing ofthe fund. Christophert said the fund is ultimately projected toraise $75 million to $100 milliob by year’s end with additional investor commitments.
The new fund is smallef than Peachtree Equity’s first which raised $110 million and ultimately invested in 17 companiee based primarily inthe Southeast. The company does not discuss publicly the investmeng performance ofits funds. Peachtree Equity was createde in 2002, when the executives who began ’as private equity investment business in 1997 left to form theie ownlocal firm. Sincse then, two of the founders have left for othet local privateequity firms, which Christophed said was a challenge fundraising for the second time. Despite the the firm is expanding with theseconcd offering. Peachtree Equity also hired private equityh veteran Wendell Reilly as a general partner.
Reilly previously founded and oversaa LLC, a venture capital-backed group of televisio n stations, and now serves as the managing partner of , a private equity firm focused on media industry investment. Christopher said the firm is also looking to hire two morejuniort executives, and one analyst to work with the new fund and managw the current stable of portfolio Christopher said he expects the second fund to ultimatelyy close 12 to 15 investment dealxs over the four-year life of the fund, with a preference for Southeasternn or local deals. “We like to invest in Atlanta; being closert is better,” said Christopher.
The shift in the economhy has led the shift in investment strategy. “We’re just looking for stabilithyright now,” Christopher said. The new fund’s backers, Christophee said, come primarily from institutional investors, including and , whicgh backed the firm’s initial splig from Wachovia Corp. in 2002. Othetr investors included local high-net-worth individuals and a large familhy officein Atlanta.