CHICAGO – Continental Illinois Venture Corp. was reincarnated in January as CIVC Partners, and the firm has a fresh $500 million commitment from affiliate Bank of America to make private equity investments.
The firm’s prior arrangement with Bank of America was to receive annual allocations of as much as $100 million from the bank. From 1990 to 1999, CIVC invested $475 million in 32 deals and realized an internal rate of return of 49%, according a statement released by CIVC.
The fund will target North American companies with $30 million to $300 million in revenue, mostly in media, financial and business services and niche manufacturing sectors. CIVC will invest between $10 million and $75 million per deal, and the firm will make control and non-control investments, as well as provide mezzanine financing in transactions, said Gregory Wilson, a managing director at CIVC. The majority of transactions likely will be control investments, and his firm will provide mezzanine debt only for the firm’s own transactions. The ability to provide mezzanine financing in a deal will be advantageous when negotiating with sellers, he said.
Other than an undisclosed amount of capital committed by partners at CIVC, Bank of America, the country’s largest bank, is the sole limited partner in the fund. However, in spite of the relationship, the bank does not normally provide senior debt in CIVC’s deals, Mr. Wilson said.
CIVC began as a venture capital firm in 1970 and later switched to buyouts in 1989. In 1994, its original parent company, Continental Bank Corp., was acquired by Bank of America.