Lower mid-market firm Align Capital Partners has closed its debut fund, Align Capital Partners Fund I, on its $325 million hard-cap, surpassing its $250 million target in a matter of months.
ACP co-founder and managing partner Steve Dyke told Private Equity International the fund was oversubscribed thanks to commitments from an array of LPs including endowments, foundations, family offices, public pension plans, and funds of funds. He declined to name any LPs.
The Cleveland- and Dallas-based firm spun out from The Riverside Company – which also focuses on the lower mid-market – in March, and began fundraising in June, said Dyke.
Dyke, along with co-founders Chris Jones and Rob Langley, had worked at Riverside for several years, investing side-by-side in portfolio companies and managing transactions. According to ACP’s website, Dyke joined Riverside in 2000, Jones in 2003, and Langley in 2010.
Dyke previously worked as an investment banker at Denver National Bank in Colorado, according to the website. Jones was previously an associate at Chicago-based private equity firm Keystone Capital and at National City Corporation's investment banking group. Earlier in his career, Jones was an associate at Ernst & Young, the website said. Langley was an associate at private equity firm American Capital Strategies and an analyst in investment banking at the Breckenridge Group in Atlanta.
ACP targets North American companies with $3 million to $10 million in earnings before interest, tax, depreciation, and amortisation in manufacturing and business services sectors.
Langley told PEI the fund hasn’t made an investment yet, but expects to make its first one later in 2016. He added that the firm has a pipeline of investment opportunities in the lower mid-market.
“It’s been a well-publicised fact that market valuations are high across all asset classes,” Langley said. “But there’s still a lot of founders and business owners every year looking to sell in the lower mid-market that are looking for partners like ACP to help them grow their business.”
He said the fund seeks to make 10 to 12 investments, and considering there are about 3,000 deals done worth under $10 million per year, there is a lineup of “great opportunities”.
Capstone Partners was the exclusive placement agent and Kirkland & Ellis the legal counsel for this fund.
According to ACP's LinkedIn page, the firm is currently looking to expand its team with a vice president and an associate.