Corbel Capital Partners has closed Corbel Equity Partners SBIC LP (CEP III) with over $200 million in capital commitments.
CEP III is one of the first licensees approved by the Small Business Administration (SBA) under its new accrual program. The regulatory framework for this program was established in August 2023 to create a new type of Small Business Investment Company (SBIC) called an Accrual SBIC.
At the core of the Accrual SBIC is the introduction of a new financial instrument called the “Accrual Debenture.” Unlike standard SBIC debentures that require semi-annual interest payments, Accrual Debentures allow interest to accrue over their 10-year term. This structure is designed to align better with the cash flows of longer-duration and equity-oriented investment strategies.
“We’re honored to be one of the first managers the SBA has approved for their new equity accrual fund program,” said Jeff Schwartz, the managing partner of Corbel Capital. “This is our third license from the SBA, which demonstrates our commitment to supporting businesses in the lower middle market and provides an additional vehicle to partner with independent sponsors, private equity sponsors, entrepreneurs and management teams to finance and support growth in their companies.”
CEP III will make growth and buyout investments of $10 million to $25 million in companies that have less than $100 million of revenue and less than $20 million in EBITDA. Two recent investments by Corbel Capital Partners include a co-investment in STAT Recovery and an investment in USI Holdings.
In May 2024, Corbel co-invested in STAT Recovery, a fintech company based in Arkansas, which was acquired by Cambridge Capital. STAT specializes in machine learning-based invoice auditing software, designed to help retail suppliers recover lost revenue by addressing improper deductions and compliance fines from major retailers. Such deductions can account for up to 2% of suppliers’ retail sales, amounting to tens of billions of dollars annually in the U.S. Since its inception, STAT has audited over $250 billion in retail transactions, enabling suppliers to recover more than $500 million in improper charges over the past five years.
In March 2024, Corbel invested in Universal Services (USI), a Minnesota-based company offering outsourced construction, fulfillment, restoration, and maintenance services for both wireline and wireless infrastructure. USI’s clientele includes major telecom providers such as Comcast, T-Mobile, Verizon, and AT&T.
Los Angeles-based Corbel was founded by Jeffrey Schwartz, a former investment professional at Ares Management and Gores Group. Other senior members of Corbel’s team include Chief Investment Officer Jeffrey Serota and Managing Directors Michael Jones and Brian Yoon.
With the closing of CEP III and since its founding in 2013, Corbel has now raised more than $1 billion in capital and has invested in over 50 platform investments.
© 2024 Private Equity Professional | October 18, 2024