Star Mountain Capital closed its Value-Added Direct Lending Fund IV above its $750 million LP capital target at approximately $1.2 billion (committed capital including debt facilities). The fund was supported by both existing and new investors, including public pension funds, insurance companies, asset managers, banks, endowments, foundations, family offices and RIA/wealth management platforms and their clients. Star Mountain received support from new and longstanding clients from more than 25 U.S. states and approximately 20 countries and regions, including Canada, Europe, the Middle East, Australia, South America and Asia.
Fund IV is more than 90% deployed and follows Star Mountain’s previous funds’ direct lending investment strategy to provide primarily senior secured loans with potential equity upside (generally via warrants and/or structured preferred equity) across a diversified pool of more than 50 companies in recession-resilient industries throughout the U.S. Investors also potentially benefit from Fund IV by co-investing alongside Star Mountain’s private BDC and SBIC fund, which provides additional buying power for portfolio diversification. Fund IV has achieved its target diversification of approximately 50 portfolio companies.
Fund IV provides strategic financing to assist private businesses finance acquisitions and organic growth, often capitalizing on the aging demographic universe of business owners looking to exit at potentially compelling valuations for buyers. Star Mountain believes it can continue to generate above market cash yields with tax-advantaged equity upside, giving investors diversified access to this large and fragmented marketplace. This strategy has generally shown to be uncorrelated to the performance of larger U.S. companies, other asset classes and geopolitical risk factors, according to Star Mountain.
“We appreciate and are honored by the trusted partnership with all our investors, team and portfolio companies and remain highly aligned with 100% of our U.S.-based full-time team sharing in profits,” Brett Hickey, founder and CEO of Star Mountain, said. “Our focus on investing in high-quality small and medium-sized businesses that are the backbone of the U.S. economy has proven compelling to our aligned network of over 1,000 investors across our funds representing nearly every U.S. state and over 30 countries worldwide.”
“We are pleased with our investment results delivered to date and continue to work hard to provide high quality, transparent investor reporting which assists with the long-term partnerships we are committed to,” Chris Gimbert, CFO of Star Mountain, said.
