Capitala Group raised $1 billion in a new, permanent capital vehicle from global institutional investors to help fund its new venture, Capitala Specialty Lending.
This funding is in addition to the $1.4 billion Capitala has invested in low- to mid-market businesses over the past 20 years and is the first vehicle Capitala has raised that focuses on a senior debt strategy for lower middle market companies.
Capitala expects the funding to provide senior debt and equity co-investments across Capitala’s family of funds. Capitala Specialty Lending’s exclusive focus on senior debt investments is a different strategy than prior Capitala-sponsored funds, which have historically been raised to invest in subordinated and mezzanine debt.
“This is great news for America’s entrepreneurs and their enterprises, and for investors looking to capitalize on the returns that those companies are capable of delivering,” said Joe Alala, III, chairman and CEO of Capitala Group. “Our new specialty lending product will open more doors for us to provide customized financing solutions for small- and mid-market businesses. The $1 billion in new capital validates Capitala’s 20-year track record of driving superior risk-adjusted returns by focusing on long-term relationships rather than on short-term transactions.”
Capitala Specialty Lending will help management teams at lower and traditional middle-market companies fill a void that was left by banks abandoning lending to this critical segment of the U.S. economy in the aftermath of the financial downturn and Dodd-Frank regulations.