The Silver State Opportunities Fund LLC has committed $5 million to Huntington Capital Fund III, a mezzanine fund providing debt and equity financing for small and mid-sized businesses, Nevada Treasurer Kate Marshall said Thursday.
This is the first fund commitment by the Silver State Opportunity Fund, Nevada’s first in-state private equity program. In January, the fund made its first in-state private equity investment, a $2 million venture with Miller Heiman Inc.
“In the course of structuring its third fund and through discussions with Hamilton Lane, Huntington Capital informed us that they had performed a great deal of research into potential investment opportunities in Nevada,” Marshall said.
She said Huntington Capital was impressed with the quality of small- and mid-sized companies seeking capital. The private equity and venture lending firm is “evaluating several companies that are located in Nevada or looking to relocate (here) for potential investments,” Marshall said.
This is the third private equity fund launched by San Diego-based Huntington Capital. The firm’s Huntington Capital Fund II, which was formed in May 2008, raised $78 million and has invested in 21 companies.
Among the companies were Anakam, an Internet security firm founded in San Diego to combat online fraud, and Environment Furniture, a Los Angeles-based business that uses reclaimed lumber from sustainable forests to make “eco-chic” furniture.
Huntington Capital looks to invest in companies with revenues between $10 million and $75 million, needing funding between $2 million and $7 million.
Mark Mathers, Nevada’s chief deputy treasurer, said Huntington Capital executives were expected to make a presentation to the Nevada Capital Investment Corp. board at their meeting on Aug. 21.
As part of the $5 million investment, Huntington Capital will open a Nevada office within the next six months. Tim Bucknack, a managing partner with Huntington Capital, was unavailable for comment Thursday.
The NCIC board of directors oversees the $50 million Silver State Opportunity Fund, which was created by the passage of Senate Bill 75 during the 2011 Legislative session. Hamilton Lane, a private equity fund-to-funds manager, was hired in August to run the fund.
The Silver State Opportunity Fund invests capital from the $310 million Nevada Permanent School Fund, which consist of nontax dollars.
“Huntington Capital will target an underserved segment within the Nevada private capital ecosystem, and attracting them to the state is a positive step towards increasing the availability of capital for growing businesses overlooked in today’s banking market,” said Miguel Luina, vice president at Hamilton Lane in Las Vegas.
The Silver State Opportunities Fund has already produced results, albeit modest ones.
Mathers said the fund’s $2 million investment in Miller Heiman in Reno was part debt and part private equity. He said on its debt investment, the fund received a distribution of about $200,000, which included its initial investment plus interest.
“That was nice to see,” Mathers said. “Private equity investments, as you know, are more long term.”
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