Granite Creek Capital Partners Closes $300m Fund for Lower Middle Market Investments

Granite Creek Capital Partners has held a final, oversubscribed, and hard cap closing of its third investment fund, Granite Creek FlexCap III LP, with $300m of capital.

Granite Creek began fundraising for the FlexCap III in 2022 with an initial target of $250m. The new fund will invest from $10m to $20m per transaction in 15 to 20 companies that are active in business services, food and agribusiness, healthcare, and niche manufacturing and distribution. Typical investments will have revenues from $25 million to $100 million and EBITDA from $3m to $15m. Granite Creek investment types include senior loans, mezzanine debt and equity.

Granite Creek was co-founded in 2005 by Mark Radzik, Peter Lehman, and Brian Boorstein and is headquartered in Chicago.

“We are grateful for the support we have received from our investors, many of whom have supported us since our founding in 2005,” said Mr. Radzik. “The robust investor interest in FlexCap III is a tribute to the important role that our firm plays in supporting the growth of the small businesses that fuel the American economy.

FlexCap III has already invested in two companies: Salem One, a North Carolina-based provider of corporate communication services including printing, direct mail, packaging, and logistics (August 2023); and Pinstripes, an Illinois-based operator of entertainment (bowling and bocce) and dining venues for corporate events, weddings and other gatherings. Pinstripes was founded in 2007 and has 14 locations across the United States (May 2023).

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Granite Creek’s earlier fund closed in 2019 with $200m of capital and invested in 16 companies, including Morrow Sodali, a New York City based provider of shareholder and bondholder services (January 2019); Veterinary Pharmaceutical Solutions, a Minnesota-based animal compounding pharmacy (February 2020); Sunset Pacific Transportation, a California-based provider of LTL logistic services  (September 2019); and Odyssey Aviation, a fixed-base aviation services provider with locations in Florida, Michigan, and Georgia (August 2022).

“Our team’s operational and financial guidance is highly valued by the companies in which we invest and is the key ingredient to the strong absolute and risk-adjusted returns that we seek,” added Mr. Radzik. “With the close of Fund III, our team is well prepared to execute on our healthy pipeline of opportunities.”

With the closing of FlexCap III, Granite Creek now has over $700m of assets under management across all its investment strategies.

Source: PE Professional

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