Siguler Guff Raises Nearly $2 Billion for Lower Middle Market Strategy

Siguler Guff Raises Nearly $2 Billion for Lower Middle Market Strategy

Siguler Guff's newest fund invests, directly and in partnership with specialist private equity sponsors, in companies with less than $20 million of EBITDA

Siguler Guff has closed its latest fund, Small Buyout Opportunities Fund V LP (Fund V), with $1.97 billion of capital. The new fund is the largest small business buyout fund in Siguler Guff’s history.

Fund V was oversubscribed after just five months of fundraising, exceeded its $1.65 billion target, closed above its hard cap, and logged a re-up rate was 95%. Siguler Guff’s earlier fund, Small Buyout Opportunities Fund IV LP, closed in January 2020 at its hard cap of just over $1.57 billion.

Like earlier funds, Fund V will continue to invest – both directly and in partnership with specialist private equity sponsors – in small and lower middle market companies that have less than $200 million in revenues and less than $20 million of EBITDA.

“We are pleased to have closed our fifth small business buyout fund, our largest ever, and gratified to have received such strong support from our limited partners for this exciting investment strategy that has created tremendous value for all stakeholders,” said Kevin Kester, a managing director and co-portfolio manager of the fund. “With over 400,000 companies, representing approximately 96% of all businesses in America, small businesses are the engine that drives the U.S. economy.”

Mr. Kester, the head of Siguler Guff’s small business investment strategy, joined Siguler Guff in 2004 and founded the firm’s small buyout opportunities funds program. Since funding this strategy in 2005 with a $300 million first fund, Siguler Guff has committed over $6 billion to over 800 companies across the United States, with nearly 500 exits and realizations. The firm has made commitments to over 100 private equity funds and closed over 200 equity co-investments since its formation.

“Over the past 17 years, we have developed a time-tested strategy for successful investing in this important market sector through commitments to private equity funds and equity co-investments alongside small buyout fund managers and deal sponsors,” said Jonathan Wilson, a managing director and co-portfolio manager of the fund. “We look forward to collaborating with our partners to identify, invest and build extraordinary businesses.”

“We are proud that small business investing has long been one of Siguler Guff’s core strategies,” said Drew Guff, a managing director and founding partner of Siguler Guff. “Over the years, we have cultivated strong relationships within the small business community, and we maintain an unparalleled network that is the foundation of our success. We want to express our deep appreciation to our limited partners for their continued trust in this important investment strategy that has consistently generated outsized returns.”

New York City-headquartered Siguler Guff is a multi-strategy private equity firm with over $16 billion of assets under management. The firm’s investment strategies include small business, opportunistic credit, distressed real estate and emerging markets. Founded in 1991 within PaineWebber, Siguler Guff became an independent firm in 1995.

© 2022 Private Equity Professional | August 11, 2022

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