Northlane closes American Capital spin-out

Coller Capital, Goldman Sachs and StepStone were among LPs in the $1.1bn fund which has been renamed Northlane Capital Partners I.

Northlane Capital Partners has completed its spin-out from American Capital following the $3.6 billion merger with Ares Capital Corporation.

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

As part of the spin-out from American Capital, Northlane will continue to manage the $1 billion buyout fund, which has been renamed Northlane Capital Partners I.

ACE III offered investors the chance to buy into $640 million of American Capital-owned private equity interests, according to a statement announcing the fund’s launch in 2014. Prior to the fund’s closing, American Capital said it would contribute all of its equity and equity-related investments in seven portfolio companies, including an option to acquire American Capital’s equity investment in an additional portfolio company, to ACE III.

ACE III closed with $1.1 billion in capital commitments in September 2014, sister title Private Equity International reported at the time. Investors in the fund included 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 to Northlane I comes on the heels of the closing of Ares Capital transaction with American Capital, as sister publication PDI previously reported. The deal, which closed on 3 January, boosted Ares’s assets by more than $3 billion to $12.3 billion.

“This spin-out 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.

Northlane’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.

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