Credit firm TCA launches its first private equity vehicle

TCA is seeking to raise up to $400m to make longer-term investments in growth-stage companies in the US and the UK that are in need of more permanent capital.

Florida-based TCA Fund Management Group has launched its first private equity vehicle, a small-cap fund that will invest in under-served growth-stage companies mainly in the US and the UK.

TCA Opportunities Fund I is targeting $300 million to $400 million, with a minimum of $5 million in commitments from TCA’s own general partners, Press said.

“Coming out of the global financial crisis, there were a lot of small businesses but not enough small-business financing,” TCA founding partner and chief executive Bob Press said. “We noticed over the years the companies that we were looking at were searching for more permanent capital.”

TCA’s main business is providing short-term, senior secured debt and advisory services to small-cap companies in North America, Western Europe, and Australia.

Press founded TCA in 2010 with the aim of launching a small-business fund that would provide $1 million to $5 million in debt through its TCA Global Credit Master Fund. Over the years, Press came to see that there was unmet demand for growth capital, and sensed an opportunity. 

TCA’s new fund will provide long-term capital instead of short-term loans, and aims to make investments of between $5 million and $15 million in 15 to 20 companies with annual revenues of between $25 million and $100 million.

According to a statement, TCA Opportunities Fund I targets a net 15 to 25 percent internal rate of return.

The investing period of the new fund is expected to last between 12 and 18 months, with a three-to-four year holding period. 

As a growth capital investor, the new fund will be “much more proactive” than it could be as a more passive provider of short-duration senior debt, Press said. For example, TCA could seek board representation and work on guiding the growth of the companies in which it is investing. The objective, he said, is to make minority, and not control investments, with clearly defined exit strategies from the start.

The first close of the fund is expected to occur in the fourth quarter of 2016, Press said, adding that TCA already has a few companies in its sights that it might potentially invest in. TCA’s credit fund has invested in sectors like healthcare, energy, food, and IT, according to TCA’s website.

Earlier this week, TCA named Bill Fickling the portfolio manager of Opportunities Fund I, according to a statement. Prior to joining TCA, Fickling was a manager at Executive Homes of Georgia for five-and-a-half years. He also helped found Mulberry Street Investment Company, the private investment branch and family office of the Fickling family, in 1986, according to the TCA website.

Prior to founding TCA in 2004, Press was a managing member at Knightsbridge Capital in London. According to UK Companies House, Knightsbridge launched in 2012.