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Chatham Capital Preps New, Bigger Fundraise

Just because fundraising season is back on for some of the biggest names in private equity and venture capital, it doesn’t mean mezz lenders are getting left out in the cold in these heady times. Chatham Capital, the Georgia-based mezzanine lender, will raise up to $400 million for its next fund, according to an individual familiar with its plans.

Chatham makes investments of up to $60 million via subordinated debt in companies with revenues of at least $10 million and earnings of $2 million that are not in real estate or early stages of development.

The move comes less than two years after Chatham reportedly sought to raise between $150 million and $300 million, which the Atlanta Business Chronicle reported in August 2009. The report quoted its founder Brian Reynolds, who said Chatham’s first three funds returned more than 15% annually to investors.

According to Chatham’s website, the mezz lender is an “$800 million mezzanine fund.” Its third fund was $350 million, the Atlanta Business Chronicle reported. Chatham does not publish specifics on its funds at its website.

The mezz lender concentrates the bulk of its investments near its home base in Atlanta, with many deals taking place in the Southeast. Since 2003, it has committed hundreds of millions of dollars to deals with healthcare companies and food producers, among other industries. Companies Chatham has invested in include: Palm Beach Tan, Preferred Medical Claim Solutions, Five Star Food Service and Sun Link Health Systems.

Chatham did not comment for this story.