RW Capital Partners is raising $50 million for a fund that would provide loans to small businesses. If successful, the fund could be eligible for a $100 million SBIC match.
RW Capital Partners, LLC today launched an effort to raise $50 million of private capital with a new fund aimed at providing loans to small businesses at a time when many are struggling through the recession-induced credit crunch. RW Capital’s fund could be matched by up to $100 million in committed funds upon successful completion of its application to be licensed by the Small Business Administration as a Small Business Investment Company (SBIC).
“Upon completion of SBIC licensing, an investment with RW Capital would have the potential to realize returns that may be enhanced by the use of SBA leverage”
RW Capital Partners is a minority-owned private equity firm led by former Lazard and GE Capital managers with more than 30 years of combined experience in private equity, commercial lending, and management of more than $4 billion of investor capital.
“We believe that America’s economic recovery will be fueled by small businesses,” said RW Capital founding partner Ellery W. Roberts. “For many small ventures, the only obstacle to recovery and growth is access to capital. RW Capital is strongly positioned to provide much-needed expansion capital to growing companies and to offer a unique opportunity for our investors and partners.”
“The current economic crisis has left too few lenders focused on lower middle market businesses,” said founding partner Michael W. Wingard. “RW Capital Partners will fill an overwhelming need for capital that can drive acquisitions, fuel growth and create jobs. If SBA licensing is approved, our limited partners’ investments would be matched by committed capital that will allow us to pursue a wide range of opportunities and realize significant returns.”
The SBIC program was created in 1958 to bridge the gap between entrepreneurs’ needs for capital and traditional financing sources. In 2009, SBIC financing of $1.8 billion benefited more than 1,400 companies. Before companies such as Costco, Staples, FedEx and Intel were household names, they were the beneficiaries of SBIC investments.
The program invests long-term capital in privately owned and managed investment firms that must pass a rigorous qualification process. RW Capital Partners recently received a “green light” letter from SBA to proceed to the next step in the SBIC licensing process, based on the principals’ level of experience, strong evidence of deal flow and an established track record of superior returns. This interim step allows RW to attract private investors whose capital may be matched by a ratio of up to two-to-one by the SBA upon completion of licensing. The government’s matching funds would be non-recourse debt with a cost indexed to comparable 10-year treasuries, thereby improving the return potential for private investors. RW has created the 1847 SBIC Mezzanine Fund, LP, with the goal of raising $50 million from private sector partners.
In qualifying RW Capital to proceed in the SBIC licensing process, the SBA recognized the principals’ 30 years of combined experience in private equity investing and commercial lending. Roberts and Wingard have managed a combined $4 billion in investments across a broad range of industries, including business services, technology services and hardware, consumer products, industrial manufacturing, food, forest products and retail.
Roberts was a founding member and Managing Director of Parallel Investment Partners, LP (formerly SKM Growth Investors, LP), a successful Dallas-based private equity firm, and was previously Vice President with Lazard Frères & Co., where he executed private equity investments through a $1.5 billion fund. Roberts’ past experience includes positions with Colony Capital, Smith Barney, and J.E. Robert Companies. During his career, Roberts has been directly involved with more than $3 billion in direct private equity investments. Roberts is also a former board member of the Los Angeles Chapter of the Association for Corporate Growth.
Wingard is former head of CIT’s Commercial Credit Division’s West Region and was previously West Region Manager and National Sales and Marketing Manager for GE Capital Business Credit. Wingard’s experience also includes management positions at Fleet’s Healthcare Leasing Finance division and Fremont Financial. Wingard has been directly responsible for managing more than $1 billion in lending commitments to middle and lower middle market companies during his career. He is a former board member of the Northern California Chapter of the Commercial Finance Association and is a former member of the Turnaround Managers Association and Association for Corporate Growth.
“Upon completion of SBIC licensing, an investment with RW Capital would have the potential to realize returns that may be enhanced by the use of SBA leverage,” said Roberts. “It is also an opportunity to partner with a minority-owned firm dedicated to a segment of the economy that requires significant capital to help drive a real economic recovery.”
About RW Capital Partners
RW Capital Partners was established to provide growth capital to small and medium sized businesses. RW investments range in size from $2 million to $10 million primarily placed through debt instruments with equity features. RW Capital’s principals have more than 30 years of experience in private equity and commercial finance. The principals’ previous $4 billion in investments have ranged across a range of industries, including business services, technology services, consumer products, industrial manufacturing, technology hardware, food processing, forest products, and retail. For more information, please visit http://rwcplp.com.