MiddleGround Capital Closes on $736 Million for Its Current Fund Offerings, Buoyed by Strong Demand From Existing LPs
LEXINGTON, Ky.-April 30, 2021-(BUSINESS WIRE): MiddleGround Capital, a Kentucky-headquartered, middle market private equity firm that makes control investments in B2B industrial and specialty distribution companies, has closed on $736 million in commitments for a series of funds that includes its flagship fund MiddleGround Partners II, LP; MiddleGround Partners II-X, LP; and Mobility Opportunity Fund, LP. MiddleGround has exceeded its target of $550 million for MiddleGround Partners II, launched in January 2021, due to strong demand from incumbent investors. MiddleGround Fund II-X is a parallel co-investment vehicle which will invest alongside Fund II. The Mobility Opportunity Fund is a dedicated overflow vehicle focused on investments in the future trends of the automotive industry including electrification of the powertrain, vehicle light weighting, connected and autonomous vehicles. The firm’s debut fund closed in August 2019 with a total of $459.5 million in commitments.
MiddleGround was founded in 2018 and is led by John Stewart, Lauren Mulholland, Scot Duncan and Monica McClinton. Previously, Mr. Stewart and Mr. Duncan worked together at Toyota Motor Corporation before moving into private equity in 2007 and 2008, respectively. It is their deep operational knowledge that forms the basis for MiddleGround’s unique operational approach. MiddleGround works with its portfolio companies to create value through a hands-on operational approach and partners with its management teams to support long-term growth strategies. The investment strategy for MiddleGround’s second fund is a continuation of the firm’s current focus on investing in high quality industrials businesses with definable value creation plans. Additionally, the fund will employ a thematic approach in certain sectors, investing behind identified trends in mobility, infrastructure, and Industry 4.0, among others.
Since its inception, MiddleGround has made ten acquisitions, and invested over $620 million. The firm’s investments are comprised of seven platforms and three add-on acquisitions. Six of these transactions were completed during the pandemic in 2020. The growth in MiddleGround’s portfolio is mirrored in the growth of its team, which now stands at 43 professionals between its Kentucky and New York offices.
MiddleGround’s dedication to its employees is reflected by being ranked in the #1 Place to Work in Kentucky for companies with less than 150 employees by the Kentucky Chamber of Commerce. A core focus of the young firm is making a positive impact on the world through its ESG program, having become the first sub-$1 billion industrials private equity signatory to the UN Principles for Responsible Investment (PRI) and a signatory to Institutional Limited Partners Association’s (ILPA) Diversity in Action initiative.
Founding Partner John Stewart said, “It is an exciting time to be working in private equity. The time for making money at the expense of the planet, the employees in our companies, and without transparency has passed. Over the last three years, we have built our firm based on an understanding that our investors are our customers and that we need to be responsive to their needs. We are extremely pleased by the market response to our current fund offerings and want to thank all of our investors for their support.”
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