Capitala Group, a Charlotte-based investment firm, is on its way to raising a $500 million investment pool, its biggest fund to date.
The firm has lined up investments from an undisclosed global asset manager and an insurance company as it looks to complete the $500 million fund by this spring, CEO Joseph Alala said in an interview Tuesday.
Among its various funds, the firm now has about $300 million available to invest in mid-sized companies around the U.S., Alala said. Capitala manages private investment funds as well as a public fund formed from a 2013 stock offering.
“Now we’ve got a lot of investment capacity,” Alala said.
With the new fund, the firm can make investments of between $10 to $50 million in companies in a variety of industries, Alala said. Unlike its previous funds, the latest one is not participating in a Small Business Administration program that provides matching capital.
Capitala got its start in 1998 as CapitalSouth Partners. Since then, it has been involved in 125 deals, representing more than $1 billion in investments. Alala said the company has produced double-digit returns for its investors, but didn’t provide specifics.
“We still are primarily generalists,” Alala said of the firm’s investment targets. “We avoid real estate, and we avoid companies that are not making positive cash flow.”
Last month, the company announced that it had exited investments in four companies, receiving $57.1 million in repaid debt and gains from equity stakes. Exiting one of the companies allowed the public fund to reduce its exposure to the energy sector, which has struggled in recent months amid lower oil prices.
“We are very conservative now on potential new energy investments,” Alala said. “We haven’t done any energy investments in a long time.”
Capitala currently has about 22 employees and is looking to hire as it begins making investments from its new fund, Alala said.