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MiddleGround Capital raises over USD1bn less than two years after raising USD460m debut fund

MiddleGround Capital, a Kentucky-based, middle market private equity firm that makes control investments in B2B industrial and specialty distribution companies, has held final closes on its flagship fund MiddleGround Partners II, LP and a specialty vehicle focused on automotive investments, Mobility Opportunity Fund, LP. Both funds were oversubscribed with strong support from Fund I Investors.

MiddleGround Partners II, a continuation of the firm’s core strategy, and its affiliated parallel funds have closed with a total of USD800 million in commitments. MiddleGround has completed 10 transactions in Fund I which closed in August of 2019 with USD459.5 million of commitments. MiddleGround expects to complete two more platform investments in Fund I before turning to the Fund II campaign, likely later in 2021.

Founding Partner John Stewart says: “When we formed MiddleGround, we had a vision of building a firm for the long term. We are pleased that our approach continues to have broad support from our Fund I investors and has resonated with select new LPs. The last twelve months have been extremely challenging and we have seen so many changes in the market. It is hard to believe that in less than three years we have grown our team to over forty-five professionals, completed ten transactions and grown our AUM to over USD1.9 billion. Accomplishing all of this in the midst of a pandemic is a real testament to our team and the management teams at our portfolio companies.”

Additionally, MiddleGround’s Mobility Opportunity Fund, a dedicated overflow vehicle that invests in automotive companies with exposure to electrification of the powertrain, vehicle light weighting, connected and autonomous vehicles, hit its hard cap of USD250 million. The Mobility Opportunity Fund invests alongside MiddleGround’s core funds giving the firm capability to take advantage of their deep automotive experience and invest in larger deals. MiddleGround Founding Partners John Stewart and Scot Duncan started their careers with Toyota Motor Corporation.

Founding Partner Scot Duncan says: “Although our core funds are focused on general industrial investments, given our deep automotive experience it makes sense for us to be actively acquiring and managing businesses in the automotive supply chain. The automotive industry is at an inflection point due to rapidly changing technology and MiddleGround is perfectly positioned to partner with companies that need to navigate these challenges.”

“Our team is our best asset. I am really excited about everything we have been able to accomplish over the last three years and I can’t wait to see what we do next,” says Founding Partner Lauren Mulholland.

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