- Thursday October 6, 2005
On October 1st, Detroit-based Peninsula Capital Partners L.L.C. held its first and only closing on its fourth mezzanine and structured equity partnership. The Peninsula Fund IV L.P. garnered $335 million of capital commitments from an overwhelmingly institutional investor base, including most Fund III investors. The Fund exceeded its fund-raising target of $300 million and was fully committed within several months of its launch.
As was the case for its previous partnerships, the General Partner raised the Fund entirely in-house without the assistance of a third-party fund-raiser organization. The General Partner’s President & Chief Investment Officer, Scott Reilly, principally coordinated the effort, which met with much enthusiasm from existing LPs and the marketplace in general, resulting in an oversubscribed situation and the need to scale-back some LPs investment amounts.
“We are equally pleased and humbled that Fund IV was so warmly received by both old and new investors.” stated Mr. Reilly. “Although we knew we had a strong track record and an unique investment style, we were unsure as to how the market would react to another mezzanine fund at a time when the conventional wisdom is that the mezzanine market is both over-funded and facing new forms of competition.” Mr. Reilly added.
Most of Fund IV’s capital was committed by Fund III investors, leaving room for only a handful of new LPs to invest in the Fund. “We were fortunate to receive much support from our legacy investors as well as to gain a few new blue-chip investors. We prefer to have a small group of investors who are committed to the asset class and who can appreciate our investment approach.” Mr. Reilly explained.
Peninsula Fund IV has the same investment objectives as its predecessors, namely focusing on mostly unsponsored transactions in the lower end of the middle market. The Fund will provide sub debt or equity, or combinations thereof in amounts from $4 million – $40 million, or even larger amounts in conjunction with its LPs.
Mr. Reilly offered, “Doing unsponsored deals has always been the cornerstone of our investment philosophy, but it is not all we do. We have a number of relationships with buyout groups that view us a valued partner, and we also have co-sponsored a fair number deals with unfunded sponsor groups.”
Fund IV was preceded by a $271 million Fund III that closed in 2001, a $143 million Fund II that closed in 1998, and a $53 million Fund I that closed in 1996. Funds I & II are functionally fully invested and have thus far returned 151% and 131% of contributed capital to its investors. Fund III is close to being fully invested and has already returned nearly half its investors’ capital.
Contact:
Scott A. Reilly, CFA
President & Chief Investment Officer
313.237.5100