Salt Lake City-based private equity firm Tower Arch Capital has successfully closed its third fund, Tower Arch Partners III, at its hard limit of $750 million. The fund was oversubscribed, reflecting robust investor interest that surpassed the target subscription level. The firm, which specializes in investments in lower middle market companies led by entrepreneurs, now manages a total of $1.6 billion across its funds.
The swift capital raise is a testament to the strong performance of Tower Arch Capital's investment strategy, which focuses on adding value to businesses with earnings before interest, taxes, depreciation, and amortization (EBITDA) ranging from $5 million to $30 million. The firm's approach centers on providing strategic growth assistance and operational consulting to founder and family-owned businesses in the lower middle market.
Co-Founders David Topham and Rhett Neuenschwander expressed gratitude for the solid investor relationships that have been crucial in establishing successful partnerships with business owners looking to professionalize and scale their operations. The commitment of Tower Arch Capital's staff as principal investors underscores their confidence in the firm's collaborative investment philosophy.
The diverse investor base for Fund III includes not only the firm's own professionals, who are the largest collective investor in the fund, but also external entities such as endowments and family offices. This mix of investors indicates a broad base of support for Tower Arch Capital's strategic vision.
Shannon Advisors played a key role in the placement process for the fund, while Ropes & Gray provided legal advisory services, ensuring a smooth and compliant fundraising campaign. With the closing of Fund III, Tower Arch Capital is poised to continue its tradition of fostering growth and providing strategic support to its portfolio companies, helping them to professionalize and expand in their respective markets.
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