Lower-middle-market investor Kian Capital Partners has held a final, oversubscribed, and hard cap closing of Kian Growth Partners III LP with $400 million of capital.
The new fund was supported by both new and existing limited partners including university endowments, fund of funds, financial institutions, family offices, and several founders of former Kian investments.
“We are grateful for the continued confidence and loyalty of our blue-chip limited partner base, and as part of our strategy, we are pleased to welcome new and recognizable limited partners to our third fund,” said Rick Cravey, a co-founder and partner at Kian. “KGP III will strengthen our commitment to the lower middle market and allow us to continue helping businesses professionalize and scale within our four core sectors — consumer, services, value-added distribution and specialty manufacturing. As in prior funds, we will continue to deploy flexible and creative capital solutions that align with our philosophy of creating win-win relationships and shareholder value.”
Kian has been an active investor over the past year and a half. In January 2023, the firm sold Motor City Industrial to AFC Industries, a portfolio company of Bertram Capital. Detroit-based Motor City is a wholesale distributor of industrial fasteners, fittings, abrasives, tools, and personal protective equipment. Kian partnered with Detroit-based private equity firm Oakland Standard to acquire Motor City in July 2015 and more than doubled the company’s EBITDA during its nearly seven-year ownership term.
In December 2022, Kian invested in Sdii Global, a Tampa-based provider of forensic engineering and earth sciences services specializing in claim resolution support for the property and casualty insurance industry. Kian first invested $8 million of senior secured debt in Sdii in 2016 to support the management-led buyout of the business from its founder.
Additional investments of Kian over the last 18 months include three other platforms, eleven add-on acquisitions, and five exits. The firm has also added four members to its team with the hirings of Jordan Lee as a principal, Thomas Bullock and Doyle Silvia as associates, and Mikaela Palma as a senior accountant.
“With the close of our third fund, our growing team is well positioned to continue to create positive outcomes for business owners and limited partners,” said David Duke, a partner at Kian. “The quality of our active deal pipeline remains strong, and we view the recent market dislocation as an opportunity given our flexible investment mandate.”
Charlotte and Atlanta-based Kian makes both control and minority investments of $7 million to $30 million of equity and subordinated debt in companies that have revenues of $10 million to $100 million and EBITDA of $2 million to $15 million. Sectors of interest include consumer, services, specialty manufacturing, and value-added distribution. Kian’s second fund closed at its hard cap in March 2018 with $250 million of capital.
“In alignment with our investment approach, Rick and I founded Kian on the premise of building a firm with enduring value and capable of making an impact for decades to come,” added Kevin McCarthy, a co-founder and partner at Kian. “We have ambitious plans for the future, and while all of our achievements thus far make us proud, we are confident that the best is yet to come.”
Kian was founded in 2011 and has offices in Charlotte and Atlanta.
© 2023 Private Equity Professional | May 2, 2023
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