Renovus Capital Partners has raised $100 million for its debut fund. Philadelphia-based Renovus is an education focused PE firm. Renovus was founded in January 2010 by Bradley Whitman, Atif Gilani and Jesse Serventi who had each worked at Leeds Equity Partners.
Renovus Capital Partners (“Renovus” or the “Fund”) announced today the receipt of its Small Business Investment Company (“SBIC”) license from the U.S. Small Business Administration (“SBA”) and that it has raised $100 million for its debut fund, including matching leverage from SBA. Renovus is an education-focused private equity firm based outside of Philadelphia, PA.
Renovus was founded in January 2010 by Bradley Whitman, Atif Gilani and Jesse Serventi, three experienced private equity professionals that had previously worked together at Leeds Equity Partners, a leading education-focused private equity firm. In March 2010, they established a strategic partnership with CMS Companies, Inc. (“CMS”), a Philadelphia based wealth manager for high net worth families and entrepreneurs, and added William Landman, a senior CMS professional to their team as their fourth partner. In 2011, Renovus added Frederick Hill, with whom they had worked closely in previous education transactions and who brings experience in middle market leverage finance to the investment team.
Renovus intends to make investments in small to mid-sized education companies. The Fund will invest in ten to twelve platform companies within the five core sectors of the education industry: Schools, Training, Content, Technology and Services. The investments primarily will be control-oriented buyout transactions or other high growth opportunities.
Within the education industry sectors, the Fund serves as a one-stop source of capital to education companies. Under this approach, the Fund provides all or most of the capital necessary to buyout or recapitalize profitable and growing education companies. The Fund partners with the entrepreneurs and the management teams of companies that can grow earnings 10-15% per year.
As a licensed SBIC, the Fund, by focusing on investing in smaller businesses, will have access to low-cost federal government leverage to enhance investor returns. This leverage is provided on a 2-for-1 matching basis to capital raised from private investors and is available on very favorable terms: 4% pricing, 10-year term, no amortization or pre-payment penalties and a fixed rate at the time of borrowing.
“The education industry has tremendous growth potential and need for capital given the macro trends in the U.S. economy,” noted Bradley Whitman, a Renovus founder. “All segments of the American workforce need to learn additional skills to compete in an increasingly global and knowledge-based economy and this is creating tremendous opportunities for private companies to offer not only education and training but also the products and services to support these activities.”
“The Great Recession of recent years has only reinforced this need,” added Atif Gilani, a Renovus founder. “There is a significant mismatch between the jobs being created and the skills of the unemployed and with the public sector facing record deficits, private companies are well-positioned to step into the breach and address this pressing need for retraining.”
“Combining our education focus with the SBIC program made a lot of sense,” concluded Jesse Serventi, a Renovus founder. “The education industry remains extremely fragmented with many small companies that have tremendous growth opportunities but lack the capital and internal resources to take advantage of them. In this environment, an investor with industry expertise can create significant value.”
About Renovus Capital Partners
Founded in January 2010, Renovus Capital Partners is an education-focused private equity fund based in Wynnewood, PA, a suburb of Philadelphia. Renovus invests in small and mid-sized businesses within the education sector, including both educational institutions and companies that provide these institutions with technology, content and services. The Fund is particularly interested in growth-oriented businesses, and the Renovus team actively partners with management to build its portfolio companies through acquisitions, new strategic initiatives and operational improvements. The Renovus team has a combined 41 years of experience investing in the education sector and the founding partners have been working together since 2005. Renovus is a licensed SBIC. For additional information on Renovus Capital Partners, see www.renovuscapital.com.
About the Small Business Investment Company (“SBIC”) Program
The SBIC program is a public-private partnership created in 1958 to help small businesses access growth capital. Administered by the U.S. Small Business Administration (“SBA”), the SBIC program provides licensed SBIC funds with additional capital in the form of a long-term, low-cost line of credit. SBICs can typically access up to 2:1 leverage on their capital raised from private investors to invest in U.S. based small and mid-sized businesses. The licensing process is long and rigorous and entails significant scrutiny of the applicant’s investment strategy, track record and team cohesion. The SBIC program is self-funding for which the SBA raises capital semi-annually in debt capital markets. The strong track record of the program and market demand have resulted in a historically low cost of funding for the SBICs.