Enhanced Credit Supported Loan Fund, a part of the Enhanced Capital family of funds, is changing its name to Hark Capital. The company closed its second fund with $203 million of commitments, including a revolving credit facility from Capital One.
Hark Capital will continue its approach of supporting financial sponsors including private equity funds, distressed PE and growth equity/VC firms. Employing its branded Arch Note, Hark Capital provides non-dilutive loans to the portfolio companies of financial sponsors in situations that would typically require equity. The loans are based on the fund’s NAV, not the credit profile of the individual portfolio company.
The Arch Note offers flexible credit structures that can support sponsor companies in innovative ways:
- Using debt rather than equity to finance growth
- Utilizing holding company debt to reduce operating company leverage or to make tuck-ins
- Providing working capital for portfolio companies with negative EBITDA
- Financing equity needs past the fund’s investment period
- Repaying capital call line debt at the end of the fund’s investment period
Hark Capital will continue to be managed by the same team since it was launched in 2013, led by Doug Cruikshank, CEO, and senior principals Rafael Castro and Rich Davis.
“The launch of Hark Capital is a natural extension of our current, differentiated strategy of supporting financial sponsors and their portfolio companies. We are excited to build on the same, successful approach of solving equity transition needs with a lower cost and more flexible solution,” Cruikshank said.
In conjunction with the rebranding, Hark Capital successfully closed the $203 million fund Hark Capital II, exceeding its target fund size, without a placement agent. Investors in Fund II represent pension, insurance company, non-profit foundation and family office assets. Fund II is now closed and is not accepting any additional subscriptions.