Chatham Capital has raised approximately $218 million towards a $500 million target for its fourth fund, according to a pair of US Securities and Exchange Commission documents filed Wednesday.
The firm held a first close on $190 million last year, according to February presentation materials seen by Private Debt Investor. Chatham IV will provide senior, first lien, second lien and mezzanine financing to US mid-market companies. The presentation cited “increased market opportunities for Chatham due to massive global liquidity contraction and exits of numerous competing lenders”.
The firm typically invests between $2 million and $60 million in the form of subordinated debt with interest, with a focus on companies with strong management teams, effective financial controls and a favorable industry outlook, according to its website.
Fund III had generated a 19.5 percent internal rate of return, according to the presentation. That vehicle includes $156 million in equity commitments and a $275 million Deutsche Bank credit facility that has since been paid down to “$44.8 million via proceeds from portfolio company exits”, according to the presentation.
Chatham declined to comment on this story.
Fund IV will require 22 percent of capital calls at the time of commitment with additional capital calls each quarter. The vehicle has a 2 percent management fee on committed capital plus 0.9 percent of leverage deployed during the four year investment period. The management fee falls to 1.5 percent of funded commitments and 0.9 percent of leverage deployed after the investment period, according to the presentation.
Former KPMG Corporate Finance managing director Brian Reynolds and Cardinal Ventures principal Nick Anacreonte founded Chatham in 2000. The firm maintains offices in Atlanta, Dallas and Providence.