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Riverside collects $542 mln for micro-cap fund

The Riverside Company raised more than $542 million for Riverside Micro-Fund IV, L.P., according to Form D filings with the U.S. Securities and Exchange Commission, exceeding the original target of $500 million. This is not a final close for the fund, which has a hard cap of $650 million, according to a person with knowledge of the situation.

The fund is overseen by managing partner Loren Schlachet. Leading the team and reporting to Schlachet is senior operating partner Jeff Goodman. Co-CEOs Stewart Kohl and Béla Szigethy are also involved.

Two early investments from Micro-Fund IV are in Kasasa by BancVue, a technology and marketing services provider, and The Dermatology Group, a New Jersey-based physician practice management company.

Riverside’s first micro-cap fund (RMCF), which closed in 2006, represented an innovative strategy of targeting small companies, with revenues of $5 million to $25 million and EBITDA of up $3 million or less.

“Focusing on the smallest ‘micro’ deals was a fairly risky proposition back when RMCF started,” Szigethy said at the close of Micro-Cap Fund III. “Over time, our strong team has shown how careful investing and world-class operational resources can supercharge growth at these little companies.”

Photo: Béla Szigethy and Stewart Kohl of The Riverside Company