American Capital Closes Private Equity Deal for $1.1 Billion - Analyst Blog

On Wednesday, American Capital, Ltd. (ACAS), the Bethesda, MD-based asset management company, announced the closing of its $1.1 billion private equity fund – American Capital Equity III or ACE III.  This transaction will expand American Capital's asset management business by adding new private equity limited partners, diversifying investors' base and augmenting earnings assets under management (AUM).

American Capital had announced the launch of ACE III, a new private equity fund focused on investing in the lower middle market companies, on May 6, 2014.  ACE III had been formed by the company to bring in more institutional investors and expand its asset management business. As slated, the fund has closed in the third quarter. Notably, American Capital is a private equity and asset management firm engaged in origination, underwriting and management of investments in middle-market private equity, leveraged finance, real estate, energy & infrastructure and structured products.

The deal would be significantly accretive to American Capital going forward. Moreover, with the closure of the deal, American Capital Asset Management will now handle nine private and three public funds with around $13 billion of earnings AUM and $83 billion of total AUM.

American Capital currently carries a Zacks Rank #4 (Sell). Some better-ranked asset managers include Gladstone Investment Corporatio (GAIN), Gladstone Capital Corporation (GLAD) and Medallion Financial Corp. (TAXI). All these stocks hold a Zacks Rank #2 (Buy).

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