Junior Capital
- Investment Range
- $5-$20MM
- Revenue
- $10-$100MM
- EBITDA
- $3-$10MM
Investment Approach
Tecum Capital Partners IV, L.P. is a $340 million SBIC fund that focuses on making mezzanine debt, minority equity, and opportunistic control equity investments. We are currently investing out of Fund IV (2025 vintage), which represents a continuation in strategy and focus of its predecessor funds, Fund III (2021), Fund II (2017 vintage) and Fund I (2013 vintage). Fund II successfully deployed over $265 million in 28 companies. Fund I, which operated under the namesake FNB Capital Partners, L.P., successfully deployed over $180 million in 26 companies. Prior to Fund I, Tecum’s founding partners invested over $55 million in capital as a merchant banking subsidiary of a regional bank. Combined, Tecum has completed over 190 platform and add-on acquisitions.
Investment Criteria
- EBITDA: Between $3 to $10 million
- EBITDA Margin: Greater than 10%
- Gross Leverage: Less than 4.0x EBITDA
- Geography: Primary operations in the U.S.
- Hold Period: Up to seven years
Transaction Types:
- Acquisition Financing
- Family Wealth Transfer
- Independent Sponsor Buyouts
- Leverage Buyouts (LBOs)
- Management Buyouts (MBOs)
- Minority Recapitalizations
Target Industries
- Business Services
- Capital Equipment with P&M
- Consumer-Oriented
- Food & Beverage
- Healthcare Services
- Industrial & Environmental Services
- Precision Manufacturing
- Transportation & Logistics
- Value-Added Distribution
Targeted Company Characteristics:
- Committed management team
- Defensible market position / differentiated product or service
- High barriers to competitive entry
- Market leadership in sustainable and non-cyclical growth niches
- Strong free cash flow characteristics
- No real estate ventures, start-up investments, project financing, or bridge loans
Our Model
Tecum's Formula For Success
How we create value via mutually beneficial transitions
Phase One
Find the Right Partner and Align Common Goals
- Find the right partner in terms of sponsor and operating partners
- Target industries we know well with positive secular tailwinds
- Look for passionate management teams and business owners within those industries
- Structure the transaction correctly to ensure a balanced partnership
- Lay out key goals and associated milestones for the company
Phase Two
Develop Strategic Plan with Executive Team
- Build strong relationship with key decision makers at the company
- Understand company’s value-proposition to its clients
- Collaboratively develop value creation plan through internal expertise and network of external resources
- Understand needs of management team to effectively execute on plan
Phase Three
Empower and Support the Executive Team
- Fill in any gaps in the management team to ensure execution of strategy (if applicable)
- Bring deep network of resources to support both temporary and permanent needs
- Allow management team to execute on strategic plan and support as needed
Phase Four
Execute Strategic Plan and Continually Re-Assess
- Create objective measurable to assess the success of the strategic plan
- Continually assess the strategic plan and pivot on a proactive basis as business environment continually changes and evolves
- “We are not trying to shove a square peg in a round hole”
