Many of our clients raise private debt and equity capital to address diverse needs, including acquisition, growth, product development, minority recapitalization, shareholder exit or investor replacement.  Fortunately, the supply of debt and equity capital is strong.

The National Center for the Middle Market tells us that 69% of mid-size firms expect to invest an extra dollar of revenue in 2018, primarily through new plants and equipment or IT improvements or upgrades.  Aside from looking to the cash on your balance sheet, where will you find capital to invest?

Private debt funds have emerged over the past 5-10 years to fill a gap created by increased financing need (economic growth) and rigid bank lending criteria.  According to Pitchbook, these funds raised $119B in 2017, representing a CAGR of 20.5% since 2009.

Growth equity now comes from a variety of new sources in a multitude of unique structures including majority and minority stakes.  Pitchbook also reports that these transactions totaled $37B in 2017, up from a low of $10B in 2009.  The number of deals increased to 777 from 360 in the same period.

Traditional PE funds are now expanding their mandates from full acquisition to minority growth equity investments, in a bid to build larger portfolios.  A new breed of equity investors specialize in these transactions.  And family offices, which have become much more transparent in the past 5 years, seek better returns through growth equity than what can be earned in more traditional investments.

Our transaction experience indicates that financing a company’s needs requires a combination of debt and equity in a customized solution.  Highland Ridge combines its corporate finance expertise and an ability to source the appropriate capital with the most efficient cost and structure.

Contact us today for an evaluation of your specific situation.