Detroit’s Peninsula Capital revs up sixth mezz fund to $402 mln

  • Firm: Peninsula Capital Partners LLC
  • Fund: Peninsula Fund VI LP
  • Amount raised: $402 mln

Peninsula Capital Partners added about $78 million in commitments in the past year to close out its sixth mezzanine lending fund at the $402 million mark, according to filings and an executive at the firm.

Scott Reilly, president of Peninsula Capital, said the fundraise for Peninsula Capital VI came within the firm’s targeted range. The Detroit firm started raising the pool in late 2014 and closed on more than 80 percent of its commitments a few months later in July 2015.

“The most recent closing (in August) was by far the smallest and was mostly comprised to existing LPs increasing their commitments to the fund,” Reilly said in an email to Buyouts. A meaningful portion of Fund VI’s capital came from existing LPs, he said.

The provider of middle-market subordinated debt and preferred stock met success on the fundraising trail as LPs, confronted with flat interest rates, turn to credit funds to seek better yields.

The firm listed 39 LPs in Peninsula Fund VI, up from 30 about a year ago, when it disclosed $324 million in commitments and a date of first sale for the fund of July 17, 2015, according to a filing.

Among LPs in Peninsula Capital VI, State of Michigan Retirement Systems committed $40 million to the fund last year. Also in 2015, the fund drew a $50 million commitment from State of Wisconsin Investment Board.

Peninsula manages about $1.2 billion of committed capital with a focus on loans in aerospace, manufacturing, IT, industrial and professional services, consumer products and distribution.

Led by Chairman William Campbell and Reilly, who is president and chief investment officer, Peninsula seeks companies with operating cash flow above $2 million. Founded in 1995, the firm sifts for companies with a history of profitability and margins that meet or beat industry benchmarks.

Peninsula Capital Partners held a final close in early 2010 for Peninsula Partners V with $389.1 million in commitments. The soft target for the fund was $350 million, with a hard cap of $425 million, Reilly said. Peninsula Fund IV drew in $335 million in 2005, and Peninsula Fund III notched $271 million in 2001.

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Update: This story has been updated to include fundraising comments from Peninsula Capital.