January 12, 2015Jose Blanco - The Central Valley Fund
The California economy has recovered from the effects of the 2008 Great Recession with employment rebounding to historic levels, albeit with certain sectors outperforming other sectors – highlighting a zero sum outcome. The California economy is expected to exceed $2.4 trillion in output in 2014, ranking the state as the 8th largest GDP in the world, just behind the United Kingdom and Brazil. Among the winners, the California service sector has shown very strong employment growth as social media and mobile app development has taken hold in the technology sector and driven robust hiring gains. The flurry of new IPOs and growing market capitalization of Silicon Valley technology firms like Apple, Google, Facebook, etc. has ushered in a wealth effect in the Bay Area economy, driving real estate prices and consumption back up in Northern California.
The Central Valley Fund (“CVF”) was established to provide private capital for small to mid-sized businesses. With a broad focus across the western United States, and target area in California’s Central Valley, CVF’s capital is used to finance later stage growth and expansion, strategic acquisitions, ownership transitions, and recapitalizations. CVF provides subordinated debt or preferred equity, the layer of a company’s capital structure between senior debt and common equity, often referred to as mezzanine capital.
For companies with a track record of profitability that cannot obtain desired levels of bank financing, raising mezzanine capital is frequently a superior alternative to raising additional common equity. Mezzanine capital is attractive to business owners because it is typically less dilutive than common equity, frequently enabling existing owners to maintain significant ownership. CVF mezzanine investments are specifically structured to accommodate the specific needs of the business. The Fund provides all portfolio companies with local personal attention—a rarity in the consolidating marketplace. We focus on growing firms across the western U.S. with at least $1 million in cash flow. Our target investment is between $2 million – $10 million. The Central Valley Fund’s principals have extensive private equity investing experience and have also built and managed successful businesses.
In addition to our private equity and business knowledge, CVF has extensive experience in the Hispanic markets in both the United States and México. Relationships with Nacional Financiera (México’s economic development bank), ProMéxico (a part of México’s Secretary of the Economy), Fondo de Fondos, and numerous Hispanic-managed businesses provide CVF the needed expertise to navigate the growing Hispanic marketplace. Hispanics are currently the fastest growing demographic in California and the western United States, and comprise more than 40 percent of the population of the Central Valley. As such, CVF is committed to expanding outreach to the Hispanic community and other underserved markets across the western U.S. We understand small business and can assist you in achieving your financing objectives.