News & Analysis

Northlane closes American Capital spinout transaction

The Maryland-based firm will continue to manage the American Capital Equity III fund after the Ares acquisition, but under a new name.

By
Justin Slaughter
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Northlane Capital Partners has completed its spinout from American Capital following the $3.62 billion merger with Ares Capital Corporation.

Northlane currently manages commitments that limited partners in the American Capital Equity (ACE) III fund purchased from American Capital, according to the 10 January statement announcing the finalisation of the separation. The fund focuses on control investments in lower mid-market companies.

As part of the spinout from American Capital, Northlane will continue to manage the $1 billion buyout fund, which will now be named Northlane Capital Partners I.

The fund closed with $1.1 billion in capital commitments in September 2014, Private Debt Investor sister title Private Equity International reported at the time. Investors included funds advised by Coller Capital, Goldman Sachs Asset Management and StepStone Group. A filing with the US Securities and Exchange Commission shows that the firm started raising capital for the fund the previous April.

The transition of ACE III commitments comes on the heels of the closing of Ares Capital transaction with American Capital, as  PDI previously reported. The deal, which closed on 3 January, boosted Ares’ assets by more than $3 billion to $12.3 billion.

“This spinout represents the culmination of a year-long effort to ensure continuity for our limited partners as American Capital went through its sale process and completed the acquisition by [Ares],” Northlane partner Eugene Krichevsky said in the statement.

The firm did not respond to a request for additional comment.

The Bethesda, Maryland-based investment firm’s partners –  Krichevsky, Justin DuFour, Sean Eagle,  and David Steinglass – have managed ACE III since its closing in 2014. They will retain their current six-person investment team, the company said.

Northlane invests in North American companies with EBITDA of $5 million to $30 million, according to the statement. The firm focuses on healthcare, outsourced business services, and industrial technology.