Milwaukee-based private equity fund Generation Growth Capital, (GGC) has closed its second fund, Generation Growth Capital Fund II, L.P. (Fund II), which significantly exceeded total capital commitments raised for Fund I.
In addition, the company also announced the close of companion fund, Generation Growth Capital Wisconsin Fund II Wisconsin, L.P. (Wisconsin Fund).
"We are quite pleased that one hundred percent of our Fund I institutional investors, who still invest in private equity, made a new financial commitment to Fund II. Many of our investors had meaningful increases over their Fund I commitment amounts," said Cory Nettles, founder and managing director of Generation Growth Capital.
"In spite of what remains a very difficulty fund-raising environment, we raised significant resources to support our ongoing acquisition and growth of Midwest-based small businesses," Nettles said.
Generation Growth Capital investors consist primarily of insurance companies, banks, foundations, corporations and some high-net-worth individuals.
"We will maintain our investment focus on Midwest-based small businesses, primarily in heavy, industrial manufacturing", said John Reinke, managing director at Generation Growth Capital. "Our initial investments out of Fund II are exceeding our performance expectations, and we aggressively are pursuing other investments to close this year," said Reinke.
In January 2012, Fund II closed on its first acquisition, Midway Industrial Supply, Inc. Midway is a Minnesota-based, value-added distributor and systems integrator of fluid handling and spray finishing equipment. In April, 2012, the Fund closed on its second investment, Tri Aerospace, LLC. Tri Aerospace is an Indiana-based manufacturer of large, complex machined components for major aerospace engine customers.
"We have very active relationship-driven deal flow, and we have a pipeline of many good investment candidates", said Nettles.
GGC Fund II continues the Funds’ "double bottom line" investment strategy, which is focused on creating "social returns" in addition to a market rate of return on investor capital. For GGC, this means investing and creating jobs in distressed communities, and, in some instances, providing capital to ethnic minority entrepreneurs to pursue investments that meet GGC’s mandate.
"In addition to providing competitive financial returns for our investors, we are proud that we also have been able to create jobs and improve the tax base in distressed communities", said Reinke.