American Discovery Capital Closes Fund II, at $190M

American Discovery Capital, a Los Angeles, CA-based merchant bank focused on founder-led and family-owned companies operating in the lower middle market, closed its Fund II, at $190M.

ADF I closed in 2019 and invested $60M across six portfolio companies and 17 add-on acquisitions. Consistent with its prior fund, ADF II will continue to target majority and significant minority investments as the first institutional capital in leading, founder-led and family-owned companies focused on the business services and software sectors.

ADF II received commitments from a diverse group of limited partners, reflecting significant reinvestments from ADC’s existing investor base in ADF I, and a broad array of new investors who share similar entrepreneurial qualities as the companies ADC invests in, including wealth managers, family offices and high net worth individuals. Importantly, over 17% of ADF II’s commitments came from the partners and employees of ADC, reflecting the firm’s long-term, relationship-driven orientation and commitment to its investors and portfolio companies and a significant alignment of incentives across all constituents.

Led by Laurent Degryse, Mike Denbeau, Jeff Gelles, John Joliet, Frank McMahon, Peter Shoemaker, Brian Webber, ADC provides a merchant banking model for the private equity industry, allowing it to generate proprietary, non-competitive investment opportunities from within its relationship network, and providing the firm with a source of market intelligence, industry expertise, M&A prospects, and professional relationships that benefit its portfolio companies.