Peachtree Equity raises $60M for lending fund - Philadelphia Business Journal:

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The fund, called Peachtree II is the second created by the private equity firm sincs opening its doorsin 2002, and one of the largestr fund closings in Atlanta since the recessiojn began in January 2008. Peachtree Equity’s new fund, licensed as a small-businesw investment company bythe , will providd capital to companies that can’t fully finance expansio or growth projects through a also known as mezzanine lending. Given the continued instability of bank credity availableto customers, Peachtrew Equity partner David Christopher said the fund will have no shortage of deals.
“We think this is a good time from amarketf perspective,” said Christopher, one of the threw partners at Peachtree Equity. “Thisa market is creating attractive opportunities.” The fund will lend at leasy $3 million to $10 million to smal businesses, typically those with less than $100 million in annuaol revenue andwith $2 million in The fund will focus on working with the existing managemenr of companies, looking to grow througgh organic processes or outsidw acquisitions. The firm’s investments will continue to be in theniche manufacturing, health-care, business and financial services, and governmentt contractor sectors.
But with the opportunity comeasincreased competition. Mezzanine funds are one of the growing sectors ofprivatew equity, with several scattered throughout the city and the Southeast. Christopherd said despite the newfound popularity of mezzanine investmentg by local privateequity firms, the firm isn’t afraid of widespread local competition. “We’l l co-invest with other firms and the other mezz playersaout there,” he said. “We don’t see them as necessarilhy direct competition.” The $60 million raised is the firstf closing ofthe fund.
Christophedr said the fund is ultimately projectedf toraise $75 million to $100 million by year’s end with additionalo investor commitments. The new fund is smallert than Peachtree Equity’s first fund, which raised $110 millionh and ultimately invested in 17 companies based primarilyg inthe Southeast. The company does not discussa publicly the investment performance ofits funds. Peachtre Equity was created in 2002, when the executivesa who began ’s private equitgy investment business in 1997 left to form theifr ownlocal firm.
Sincs then, two of the founders have left for other local privateequity firms, whicu Christopher said was a challenge fundraising for the second time. Despite the the firm is expandingg with thesecond offering. Peachtreer Equity also hired privated equity veteran Wendell Reilly as a general Reilly previously founded andoversaw LLC, a venture capital-backedr group of television stations, and now serves as the managing partner of , a privatde equity firm focused on media industrhy investment. Christopher said the firm is also looking to hire two more junior executives, and one analyst to work with the new fund and managre the current stable of portfolio investments.
Christopher said he expects the seconx fund to ultimately close 12 to 15 investment deals overthe four-yearf life of the fund, with a preference for Southeaster or local deals.