Credit Opportunity Fund
Overview
Sun Mountain Capital provides debt financing through its Credit Opportunity Fund. The Credit Opportunity Fund seeks to provide debt capital to lower middle-market companies primarily in the Southwest region looking for capital to achieve a higher level of performance. We target high quality businesses that are market leaders with distinct competitive advantages and provide a compelling outlook for growth. The investment opportunity may arise due to an acquisition, management buyout, ownership succession or internal growth projects. Further, our team has significant experience investing in late stage, venture capital-backed companies and is comfortable customizing debt financing solutions to the needs of the situation.
The Credit Opportunity Fund is supported through a partnership with Los Alamos National Bank, one of the leading banks in the Southwest region. Our partnership with Los Alamos National Bank allows us to provide financing for our clients across the debt spectrum – revolving, senior secured and mezzanine debt.
Investment Criteria
While we evaluate potential opportunities on a case-by-case basis, our investments generally demonstrate the following characteristics:
- Transaction types: Management buyouts, acquisition financing, ownership succession, recapitalizations, growth capital, venture debt lending
- Investment size: Varies, but generally $3 to $10 million. We will consider leading or participating in larger deals through co-investments with other capital providers
- Structures: Optimized to the particular situation with the flexibility to provide a one-stop financing solution or provide stand-alone senior or mezzanine debt.
- Maturities: Generally up to five years
- Financial performance: Generally EBITDA of $2 to $10 million with attractive operating margins, stable cash flows and a positive outlook for growth
- Geography: Our focus is on the Southwest, from Texas to Southern California, including Colorado, Utah, Arizona, Nevada and New Mexico
- Industries: We will consider a broad range of businesses, but generally avoid real estate development and natural resource exploration investments
- Management: High quality management team with significant investment or ownership in the company and aligned incentives
While we are not interested in operating or controlling a company, our team includes professionals with significant expertise in working with management teams as they confront the unique challenges and opportunities associated with growth. Consequently, we generally expect to at least have board of director observation rights and serve as a valuable resource to our management partners.
Contact Info:
David Kocon david.kocon@sunmountaincapital.com (505) 954-5438
Brian Birk brian.birk@sunmountaincapital.com (505) 954-5420
