Searchlight teams with media and telecom bank LionTree on growth financing

  • Alternative to VC and bank financing
  • Firms will work together on sourcing
  • Searchlight to invest out of existing funds

Searchlight Capital Partners is teaming with investment and merchant bank LionTree to offer financing for growth companies in the technology, media and telecom sectors, the latter firm’s specialty.

The partnership, called LightTree Capital Solutions, “will provide a distinct alternative to traditional venture capital and bank financings,” the firms said in a statement.

LionTree Founder and CEO Aryeh B. Bourkoff was quoted as explaining that existing capital-raising options don’t appeal to many growth-stage clients: “They don’t want to raise debt while they are rapidly growing, nor do they want to raise another dilutive equity round or go public prematurely.”

LightTree will give these companies access to the range of funding solutions, “straddl[ing] debt and equity,” that the bank’s Fortune 100 clients enjoy, Bourkoff said.

According to a person familiar with the situation, Searchlight and LionTree will work together on sourcing. The partnership does not represent a new platform for Searchlight, which will contribute capital from existing vehicles. Having closed two flagship private equity pools, the firm is currently raising a non-control investment vehicle, Searchlight Opportunity Fund. That fund is targeting $750 million.

LionTree was founded by Bourkoff and fellow former UBS banker Ehren Stenzler in 2012. Bourkoff was head of investment banking for the Americas at UBS, before leaving to start his own firm.

According to The New York Times, LionTree’s advisory assignments have included Charter Communications’ acquisition of Time Warner Cable, Verizon’s deals for AOL and Yahoo and the IPO of Snap Inc. The firm has offices in New York, San Francisco, London and Paris.

Searchlight’s founding partners include Eric Zinterhofer, formerly co-head of media and telecom at Apollo Global; Oliver Haarmann, an ex-Kohlberg Kravis Roberts executive; and Erol Uzumeri, who formerly led PE at Ontario Teachers Pension Plan.

The firm’s media and telecom investments include Liberty Cablevision of Puerto Rico, General Communication Inc, TouchTunes and Hemisphere Media Group.

Action Alert: Check out Searchlight’s Form ADV here.

The Los Angeles skyline at night with searchlight. Photo courtesy Thomas Faull/iStock/Getty Images.