Tecum Capital has held the first closing of its second SBIC (Small Business Investment Company) fund having secured a license from the US Small Business Administration (SBA) for the fund’s operation.
This second fund, Tecum Capital Partners II, is fully subscribed at USD225 million, and will continue the strategies of its first SBIC fund by making mezzanine loans and minority equity investments across many industries.
"The second SBIC license is a significant achievement for Tecum Capital as it will help drive our long-term growth plans,” says Stephen J Gurgovits, Jr, managing partner of Tecum Capital Partners. “This new fund aligns with our primary investment strategy to provide strategic, long-term debt and equity capital solutions for lower middle market companies.”
With a strong interest in Rust Belt states as well as the Midwest, Southeast and Mid-Atlantic regions, the team at Tecum Capital supports independent sponsors, family offices, private equity funds, and management teams to facilitate recapitalisations, buyouts, generational transitions, acquisitions, and other growth capital needs.
“Through strategic guidance and operational improvements, Tecum Capital offers an attractive partnership for our portfolio companies. Tecum is Latin for ‘with you’ and relationship investing is an important part of our business,” Gurgovits says.
During the four years under its first fund, Tecum saw the total employee count of its portfolio companies increase 23 per cent to 3,677.
The average investment size for the new fund will be USD3 million to USD15 million per transaction.
“Our investment criteria is similar to our first SBIC fund,” says Gurgovits. “We are targeting the same size companies using the same proven strategies. Our investment philosophy is driven by a seasoned team at Tecum Capital, which creates a strong value proposition for our investors and clients.”
The investor base of the new fund includes most of the investors from the first SBIC fund, along with several new institutional investors, including several banks.
Originally launched as a wholly-owned subsidiary of FNB Corporation in 2005, the Tecum Capital team spun out and formed its first SBIC fund in 2013. Along with Gurgovits, the firm’s original founding partners include Matthew LT Harnett and Tyson S Smith, all of whom continue to provide leadership to the 10-person investment team.