FNB Capital Partners has launched the Small Business Investment Company (SBIC), which closed in May 2013 and received its licence from the US Small Business Administration to operate FNBCP as an SBIC on 21 August.
Along with its initial capital raise and SBA leverage, FNBCP has deployable capital of USD175m. FNBCP’s investors include several high net worth individuals, a pension fund and six regional banks, including anchor investor FNB Corporation.
FNBCP, which exceeded its initial target of USD150m, will be managed by Tecum Capital Management.
As the only active SBIC based in Pittsburgh, Pennsylvania, FNBCP will focus on mezzanine debt and private equity investments in lower middle market companies. FNBCP’s goal is to add value to the regional business and entrepreneurial community by growing small businesses into larger enterprises and supporting job growth. Accordingly, FNBCP plans to provide up to USD10m in capital for change of control transactions, recapitalizations, acquisitions, refinancing and growth initiatives.
FNBCP and Tecum founders Stephen J Gurgovits, Jr (pictured), Matthew LT Harnett, and Tyson S Smith formerly managed F.N.B. Capital Corporation, a wholly-owned merchant banking subsidiary of FNB Corporation. Collectively, the FNBCP team has 35 years of experience making and managing private equity and mezzanine debt investments, including the placement of over USD250m in more than 40 companies.
The SBIC programme was created in 1958 and is administered by the SBA. SBICs are financed by private investors, and are eligible to obtain low cost leverage on their private capital from the SBA. SBICs are eligible for leverage if they adhere to specific SBIC investment and regulatory guidelines. SBICs invest in small businesses, defined as companies with an average net income of less than USD6m over the prior two years and a net worth of less than USD18m, though certain exceptions can be made based on the number of employees at the small business.
