Flexible capital. Tailored solutions.
Our portfolio is comprised of primarily investments in subordinated, or mezzanine, debt and secured debt of lower middle market businesses, generally in conjunction with some form of equity interest such as warrants or direct equity investments. We typically invest between $5 million and $25 million per transaction, with the structure of each investment tailored to the company’s needs and situation.
Mezzanine Debt Investments. Our mezzanine debt investments include senior subordinated notes and junior secured loans. These loans will typically have a relatively high fixed interest rate (often representing a combination of cash pay and payment-in-kind interest), prepayment penalties, and amortization of principal deferred until maturity.
Senior Secured Loans. We also structure some of our debt investments as senior secured or unitranche loans. These loans will typically provide for a fixed interest rate and may contain principal amortization requirements, excess cash flow sweep features, and prepayment penalties. Senior secured and unitranche loans require a first or second priority lien in all existing and future assets of the borrower, and may take the form of term loans or revolving lines of credit.
Equity Securities. Our equity securities typically include a direct minority equity investment in common or preferred stock of our portfolio companies. We may also receive warrants for a minority equity interest in a portfolio company in connection with a debt investment. Our equity investments are typically made in connection with debt investments in the same portfolio companies.