Siguler Guff & Company has raised more than $3 billion for its small buyout strategy, marking the largest fundraising in the strategy’s history as the private markets investment firm expands its exposure to U.S. small and lower middle-market companies.
The New York-based firm raised more than $2.3 billion for commingled vehicles, including Small Buyout Opportunities Fund VI, along with nearly $700 million through separately managed accounts. The fundraising attracted commitments from both existing and new investors.
Siguler Guff, which manages approximately $19 billion in assets, plans to continue investing through private equity fund commitments and selected direct equity co-investments. The strategy focuses on established U.S. companies with less than $200 million in annual revenue and typically up to $50 million in annual EBITDA.
The firm is particularly targeting founder- and family-owned businesses with established operating histories, resilient fundamentals and strong positions within specialized markets. Its investment model combines relationships with lower middle-market private equity sponsors with direct participation in selected transactions.
Fund VI is targeting a large but fragmented portion of the U.S. economy. Based on U.S. Census Bureau data cited by Siguler Guff, the small and lower middle market encompasses more than 500,000 businesses and represents approximately 96% of U.S. firms.
“We believe supporting family- and founder-owned American businesses as they professionalize and grow continues to offer an enduring investment opportunity,” said Kevin Kester, partner and co-managing partner of Small Business Investments at Siguler Guff.
The latest capital raise gives the firm additional resources to pursue that strategy at a time when ownership transitions, succession planning and growth capital requirements are creating opportunities across privately held businesses.
Siguler Guff launched its small business investment strategy in 2006. Since then, the firm has committed more than $10 billion across more than 1,000 U.S. companies representing an aggregate workforce of more than 400,000 employees.
The strategy has also completed more than 300 equity co-investments. Siguler Guff has served as the largest limited partner for more than 87 private equity sponsors and has backed 46 first-time funds, building a network intended to provide access to transactions across the lower middle market.
Those sponsor relationships are a central part of the investment strategy. Rather than relying solely on direct acquisitions, Siguler Guff allocates capital to specialized private equity managers while selectively investing alongside them in individual portfolio companies.
That structure provides exposure across a diversified group of companies while allowing the firm to increase its investment in selected transactions through co-investments.
“In this market, deep relationships and specialized expertise can create a meaningful advantage,” said Jonathan Wilson, partner and co-managing partner of Small Business Investments. “Our experience has given us the insight and network to identify compelling opportunities and partner with high-quality sponsors and companies.”
The size of Fund VI and the associated separately managed accounts also reflects the continued institutionalization of lower middle-market private equity. Smaller businesses can offer opportunities for operational improvements, management expansion, add-on acquisitions and professionalization that may be less accessible in larger and more heavily intermediated transactions.
For Siguler Guff, its nearly two decades of activity in the segment provides a substantial base of sponsor relationships and portfolio experience from which to deploy the new capital.
“This record close reflects the scale, maturity and success of the small buyout franchise our team has built over more than two decades,” said Drew Guff, co-managing partner and chief investment officer.
Siguler Guff has 30 years of experience investing in private markets and operates strategies spanning small business buyouts, emerging markets, opportunistic credit, real estate and small business credit. Its investor base includes corporate and public employee benefit plans, endowments, foundations, government agencies, financial institutions, family offices and high-net-worth investors.
The $3 billion fundraising provides the firm with its largest pool of capital to date for its small buyout strategy, extending a platform that has invested across more than 1,000 U.S. businesses since its launch.