New York – December 19, 2019 – AEA Investors LP (“AEA” or the “Firm”), a pioneering alternative investment manager specializing in middle market private equity and debt investments, announced it has successfully closed its fourth Small Business Fund, AEA Investors SBF IV (“AEA SBF IV” or the “Fund”), with total equity commitments of $877 million. Substantially oversubscribed, the Fund includes commitments from a diverse group of public and private institutional investors, receiving strong support from its existing investor base as well as first-time commitments from a select group of new institutions.
Established in 2004, AEA’s Small Business Private Equity team (“AEA SBF”) currently manages nearly $1.5 billion of invested and committed capital. Mirroring the approach and sector focus of AEA’s Middle Market Private Equity strategy, AEA SBF IV will continue its strategy of making control investments in leading North American and European headquartered lower middle market companies within the value-added industrial, consumer and services sectors. AEA SBF seeks to partner with businesses that have enterprise values between $25 million and $250 million and back existing management to build market leaders.
AEA SBF IV went to market with a $600 million target and hit its LP hard cap of $750 million a few months later, representing a nearly 90% increase in third-party capital from its 2015 vintage fund, AEA SBF III. The General Partner committed an additional $115 million of capital alongside AEA SBF IV limited partners, representing the largest single investment and demonstrating alignment between the Firm and its investors. The Fund also received an additional $12 million in commitments from its network of current and former executive investors.
“We are extremely pleased to have closed our fourth and largest Small Business fund to date and appreciate the ongoing support from our returning limited partners and the confidence of our new investors,” said Alan Wilkinson, Partner and Co-Head of Small Business Funds at AEA Investors. “This impressive support underscores the strength of the team we have assembled, our successful track record in this area over the past 15 years, and the breadth of opportunities ahead. We look forward to continuing this strong momentum as we continue to deploy AEA SBF IV.”
“With many high-growth opportunities in the lower middle market, our talented team is eager to put this capital to work, partnering with successful entrepreneurs and management teams to achieve their strategic visions,” said John Cozzi, Partner and Co-Head of Small Business Funds at AEA Investors. “Leveraging our operational and strategic expertise and significant resources, we are poised to generate meaningful long-term value for both our investors and the companies with which we partner.”
The Fund recently made its first investment in APG, a leading independent provider of maintenance and repair services for heavy-frame industrial gas turbines. The support of AEA SBF’s exclusive Executive Partner network of highly successful industry executives provided the Firm with a significant advantage in sourcing the opportunity, quickly becoming management’s preferred partner. AEA SBF’s Executive Partner program serves as a true point of differentiation not only for helping the investment team source high-quality opportunities but offering the management teams of these businesses the knowledge, network and resources to help their business achieve their short term and long term goals.
Consistent with AEA’s roots as a firm founded by families, over 80% of AEA SBF’s investments have been made in partnership with founder-led businesses including National Rehab Equipment, Phillips Pet Food & Supplies, PPC Industries, PLZ Aeroscience, Colony Hardware, The Evans Network of Companies, Galco Industrial Electronics, Flow Control Group, Barnet Products and Mesa Line Services.
Kirkland & Ellis served as fund counsel. The firm engaged no intermediary to assist in fundraising.
About AEA Investors LP
AEA Investors LP was founded in 1968 by the Rockefeller, Mellon and Harriman family interests and S.G. Warburg & Co. as a private investment vehicle for a select group of industrial family offices with substantial assets. AEA has an extraordinary global network built over many years which includes leading industrial families, business executives and leaders; many of whom invest with AEA as active individual investors (“Participants”) and/or join its portfolio company boards or act in other advisory roles. Today, AEA’s approximately 80 investment professionals operate globally with offices in New York, Connecticut, London, Munich and Shanghai. The firm manages funds that have approximately $15 billion of invested and committed capital including the leveraged buyouts of middle market companies and small business companies and mezzanine and senior debt investments. AEA Private Equity invests across three sectors: value added industrials, consumer, and services. AEA SBF IV is part of a strategy within AEA that currently manages over $1.5 billion of invested and committed capital. The small business fund team seeks to help grow and transform companies at the lower end of the middle market by sponsoring growing companies with proven management teams and superior business models.
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