In mid-January, the principals of GMB Mezzanine Capital announced that the firm successfully closed its third fund, GMB Mezzanine Capital III, L.P., after raising more than $270 million. The $270 million is made up of capital from large institutional investors, regional and national banks, family offices, and high net worth individuals. The target investments for the Fund will be companies in the lower middle-market with less than $200 million in enterprise value. The Fund will finance between $3 to $25 million in subordinated debt and non-control equity to be used for acquisitions, growth needs, recapitalizations, and buyout transactions.

In the acquisition financing arena, capital availability is destiny as companies require reliable access to capital to grow over the long term. Unforeseen capital needs usually arise when acquirers least expect it. This can cause some concern for the acquisition financing provider, especially when covenants tighten up and that working capital availability is utilized faster than expected.

Mezzanine debt borrowing is usually a straightforward activity that many companies use for funding of transitional growth. Mezzanine debt lenders are highly transparent about their due diligence approach and their post-closing loan management making it easy for companies to engage with.

Elections have consequences and positive ones at that for the acquisition financing middle market. While much media attention is paid to the direction of the yield curve and the Fed’s likely rate cuts, scant attention is paid to the more important drivers of the acquisition financing market – business psychology and regulatory climate.

GMB Mezzanine Capital III, L.P. raises more than $270 million

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