Texas-Based GP Capital Partners Launches $275M Small Business Fund—With a Key Focus on Texas Companies

Small businesses in Dallas-Fort Worth and across Texas just got a new potential funding source: Four Houston-based finance leaders have launched the $275 million GP Capital Partners fund.

The fund is structured as a Small Business Investment Company (SBIC) through the U.S. Small Business Administration, and aims to fuel the growth of privately held, lower middle market businesses in the southern U.S.—with a particular focus on businesses in Texas and the Gulf Coast.

“The types of companies with which we plan to partner are the backbone of our regional economy. They create good jobs and are poised for growth,” said Curtis Hartman, a principal of the fund, in a statement “While small businesses disproportionally drive economic growth and employment, they are underserved by traditional banks and other capital providers. We’re here to support and accelerate their success.”

Paul Hobby, Gina Luna, and Peter Shaper are the other principals in the fund. The four executives are leaders at Houston-based investment firm Genesis Park, and will extend the firm’s private investment platform with the new fund.

Typical investments will range from $5M to $20M

GP Capital anticipates making 20 to 25 investments over the life of the fund, with investments typically ranging from $5 million to $20 million. They’re targeting profitable companies with $10+ million in revenue and $2-10 million in EBITDA, “with proven business models and seasoned management teams.”

The fund will make both debt and equity investments across diversified industries, its principals say, especially on markets where the team has expertise—including communications, IT, business and industrial services, and advanced and tech-enabled manufacturing.

Dallas and Houston have a need for more capital providers

The principals behind the fund note that Dallas and Houston are “ranked among the top five U.S. cities for middle market firms, with a concentration of startups scaling quickly to join the middle market. Despite the strengths of the Texas market, there are relatively few non-bank, non-energy focused, lower middle market capital providers.”

GP Capital hopes to help fill that apace—and to add value with its principals’ experience across private equity, private credit, banking, professional services, and as operating company executives.

“This is not a one-sided deal where we make a loan or equity investment and sit-back, simply monitoring performance. We’re in this to help these companies grow, transition and succeed,” said fund principal Gina Luna in the statement.

“I love working with owners and management teams and helping them take their company to the next level,” Luna added. “That’s what we have all done for most of our careers. We know that if our partners are successful, we are successful, and that drives us every day.”

You can more about the fund and Genesis Park at the firm’s website.