FedCap Partners, a private equity fund focused on the federal contracting industry, had its initial closing on 5 February 2010.
The objective of FedCap is to invest in and partner with small and middle market federal services and technology companies who are positioned in growing areas of the federal budget and whose owners desire growth capital and advice.
FedCap plans to make both minority and majority equity and debt investments and provide advice from industry experts to enable the fund’s portfolio companies to become attractive targets for acquirers.
Two primary factors have disproportionately adversely affected small and medium sized federal contractors in recent years. First, the continuing "capital crunch" has impacted federal contractors under USD50m in revenue and minority equity capital is in short supply. Secondly, the Small Business Administration’s recertification rule has made it much more difficult for companies with 20 per cent or more in set-aside revenue to sell and receive fair market value for their businesses.
FedCap expects to partner with owners of companies impacted by these issues and provide capital and advice to transition contracts and accelerate growth.
The managing member of FedCap Partners is FedCap Advisors, whose managers and owners are Rick Knop and Leslee Belluchie.
