Thayer Street Partners Closes New $275M Fund

Thayer Street Partners, which describes itself as a private investment firm that provides flexible growth capital to technology-enabled financial, real estate, and business services companies, announced it has closed more than $275 million for its Thayer Street Partners Opportunity Fund II, LP.

The company said it received strong support from existing investors in their debut fund, managed accounts, and various co-investment vehicles, as well as from a broad base of new limited partners.

The new fund will focus on investment in “resilient, recurring revenue businesses in the lower middle-market.” That is an area often overlooked by investment funds. Middle-market have varying definitions, depending on the source. A typical annual revenue size can run from $10 million to $1 billion. Lower middle-market would be $10 million to maybe $100 million or so. These are companies typically with fewer choices in financing but that often have significant based of business and the potential for eventually growing into a more substantial company, giving an upside to investment.

Initial investments will be in a target range of “$5 to $50 million per transaction with significant scalability, leveraging its sector expertise and extensive underwriting and operating experience to partner with entrepreneurs and management teams to instill institutional best practices, unlock value and accelerate growth.”

Thayer Street says that to date it has made more than 30 investments in financial services, business services, and real estate services sectors.

Thayer works with three different types of investments. First is growth equity, either primary growth capital or secondary liquidity, from late-stage venture to mature growth stages, and typically non-control but meaningful minority positions. There’s flexible debt with either structured asset financing, corporate notes, or asset funding. Finally, there are platforms, finance joint ventures, or special purpose vehicles.

Thayer Street says that its investment team members all worked at private equity, private credit, or investment banking companies and that they have “extensive operating and investment experience, and sector expertise in the technology-enabled business and financial services sectors.”

The firm also has business advisors who are “former Fortune 100 CEOs and senior management, current and former board members of leading financial institutions and insurance companies, and successful technology entrepreneurs.”