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Pittsburgh private equity firm raises $79.6M toward its biggest fund to date

By Patty Tascarella, Senior Reporter, Pittsburgh Business Times

Tecum Capital Partners has raised $79.6 million for its third fund, targeting $100 million, according to a filing with the U.S. Securities and Exchange Commission.

Based in Wexford, Tecum is Pittsburgh’s fourth-largest private equity firm as ranked by capital under management, which was $750 million. Founded in 2006, it was the region’s first SBIC fund, short for Small Business Investment Company, which means Tecum’s fund can leverage matching funds on a two-to-one basis from the U.S. Small Business Administration up to a cap of $175 million on the SBA’s contribution.

So, Tecum’s new fund will likely be $275 million, its largest to date.

Stephen Gurgovits Jr., Tecum’s managing partner, said it is scheduled to present to the SBA for final licensing in late July. Traditionally, obtaining SBA approval and licensing can be a lengthy process that typically takes three to four months.

Investors in the new fund are a mix of local and national financial institutions — Morgan Stanley, Huntington National Bank, TriState Capital Bank, NexTier, First Commonwealth Bank, Flagstar Bank, CNB Bank, S&T Bank, Northwest Bank, Dollar Bank, CFG Bank, Cortland Savings Bank and Truist. S&T, NexTier and TriState invested in the second fund which was raised four years ago. Since the fund is licensed as an SBIC, its bank investors become eligible for Community Reinvestment Act credits.

Tecum’s investments start around $3 million but can range up to$15 million. There is carryover impact from a locally managed fund as Pittsburgh-area banks and law firms may be brought into Tecum’s deals although its portfolio is not confined to southwestern Pennsylvania.

Gurgovits told the Business Times in February 2020 that it expected to raise a third SBIC fund. At that point, $170 million of the $265 million fund it raised in spring 2017 was invested. By now, little is left for new deals.

Tecum marked 27 transactions with the July 15 announcement that it had staked waste and recycling firm BP Business Solutions, its second Pennsylvania deal in less than two weeks. Tecum confirmed on July 6 that it teamed with a syndicate of local banks to invest in Altoona-based tomato sauce maker DelGrosso Foods.

The private equity firm has been busy on other fronts as well. It hired David Bonvenuto, former president and CEO of defense contractor XPER Inc. and of Oberg Industries Inc., as a director on its investment team, bringing staff to 16.