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First Hispanic Private Equity Fund Opens For Business Fund Seeks to Invest $70 Million in Established Companies
Bank One stepped up with the first investment commitment — up to $5 million — and provided initial financing in the early stages of the fund's formation. Bank One also assisted in recruiting additional investors.
"The support, expertise and recruitment of other investors by Bank One and the Hispanic Chamber has been essential in bringing this fund to reality," said Victor Maruri, fund manager, who has more than 25 years of experience in investment banking and capital markets.
Hispania Capital Partners ( http://www.hispaniapartners.com ) plans to help a number of companies accelerate their growth through equity investments over the next few years with the participation of the U.S. Small Business Administration. The fund typically will invest $4 million to $8 million in businesses owned or managed by Hispanics and those serving the fast-growing Hispanic community.
This is the first national fund focused solely on Hispanic businesses and is licensed by the SBA as a Small Business Investment Company. That allows the SBA to guarantee financing of up to twice the amount of private capital raised by Hispania Capital.
With initial private capital of $21 million and up to $42 million in SBA leverage, Hispania Capital starts off with a war chest to arm Hispanic companies to battle for the business of 35 million Hispanic Americans, who spend $450 billion each year. The country's Hispanic businesses employ more than 1.3 million workers and generate revenue of more than $180 billion.
Over the next five years, the Hispanic population is projected to grow five times faster than the overall U.S. population. Bank One has focused on Hispanic initiatives, such as the fund, because of the substantial Hispanic population in seven key markets Bank One serves: Chicago, San Antonio, Houston, Dallas, Phoenix, Denver and Tucson.
"We know the importance of supporting our communities, whether it's through bilingual employees, banking services, business loans or investments," said Pete Gillespie, senior vice president in Bank One's Middle Market Banking and a member of the fund's advisory board. "We know the fund will provide inspiration for the thousands of Hispanic small businesses served by banks like Bank One across the country."
Hispania Capital is looking to work with established middle-market manufacturing, service and technology companies with annual sales of $10 million to $200 million.
"We see tremendous opportunities to provide growth equity to Hispanic businesses, which historically have struggled to get enough capital," said Carlos Signoret, co-manager of the fund. "This fund will help larger companies achieve the kind of rapid growth that would be otherwise impossible."
Verizon Communications is presently the fund's largest investor. The investment banking firm of Duff & Phelps LLC will provide support and technical assistance through its joint venture agreement with Hispania Capital Partners.
The fund's investment decisions will be based on four primary criteria:
Management: Business leaders and managers with extensive industry and operational experience are the top priority.
Market: The market must have good long-term growth prospects and have large enough potential revenue.
Product: The product or service must have a sustainable competitive advantage.
Realization of gains: Managers must recognize that the fund's eventual exit strategy may include strategic sales, a merger or a public offering.
Hispania Partners usually will seek a return on its investment three to five years after its initial investment.
Information about the fund is available through Hispania Capital Partners LLC, 311 S. Wacker, Chicago, IL 60606 or by calling (312) 697-4600 or online at http://www.hispaniapartners.com.
Hispania Capital Partners is the leading private equity investment firm investing equity capital in companies that benefit from the demographics of the U.S. Hispanic marketplace. It invests in high-quality companies and serves as their financial and strategic partner.
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