Peachtree Equity raises $60M for lending fund - Atlanta Business Chronicle:

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The fund, called Peachtree II L.P., is the secon d created by the private equity firm sinc e opening its doorsin 2002, and one of the largesf fund closings in Atlanta since the recession began in Januar 2008. Peachtree Equity’s new fund, licensed as a small-businese investment company bythe , will provide capitall to companies that can’t fully financwe expansion or growth projects through a bank, also known as mezzanin lending. Given the continued instability of bank credit availablewto customers, Peachtree Equity partner Davifd Christopher said the fund will have no shortagde of deals.
“We think this is a good time from amarkett perspective,” said Christopher, one of the three partners at Peachtreew Equity. “This market is creatingt attractive opportunities.” The fund will lend at least $3 million to $10 million to small typically those with lessthan $100 million in annual revenue and with $2 millionj in earnings. The fund will focus on workinv with the existing managementof companies, looking to grow through organic processes or outside The firm’s investments will continue to be in the niche manufacturing, health-care, business and financial and government contractor sectors. But with the opportunity comes increased competition.
Mezzanine funds are one of the growinhg sectors ofprivate equity, with severa l scattered throughout the city and the Christopher said despite the newfound popularitty of mezzanine investment by local private equitgy firms, the firm isn’t afraid of widespreaxd local competition. “We’ll co-invest with other firms and the otherr mezz playersout there,” he “We don’t see them as necessarily direct The $60 million raised is the first closin g of the fund. Christopher said the fund is ultimatelyt projected toraise $75 million to $100 million by year’sd end with additional investor commitments.
The new fund is smaller than Peachtred Equity’s first fund, which raised $110 million and ultimately invested in 17 companiew based primarily inthe Southeast. The compang does not discuss publicly the investment performance ofits funds. Peachtreed Equity was created in when the executives whobegan ’s private equitty investment business in 1997 left to form thei r own local firm. Since then, two of the foundera have left for other locapl privateequity firms, whichu Christopher said was a challenge fundraising for the second time. Despiter the departures, the firm is expandingf with thesecond offering.
Peachtrede Equity also hired private equity veteran Wendell Reilly as a general Reilly previously founded andoversaw LLC, a venture capital-backed group of television and now serves as the managing partnerf of , a private equity firm focused on media industryu investment. Christopher said the firm is also lookin to hire two more junior and one analyst to work with the new fund and managse the current stable ofportfolio investments. Christopher said he expects the secon fund to ultimately closer 12 to 15 investment dealsw overthe four-year life of the with a preference for Southeasterhn or local deals.