NEW YORK–(BUSINESS WIRE)–Star Mountain Capital, LLC (Star Mountain), a rapidly growing, employee-owned U.S. lower middle-market investment firm with approximately $4.5 billion in assets under management (AUM), is pleased to announce that it closed its second SBIC fund above its target at $286 million of investible capital, which is a fund size that optimizes the maximum amount of SBA debentures accessible for investors. As part of the Small Business Investment Company (SBIC) program, SBIC Fund II, like SBIC Fund I, benefits from the full $175 million of Small Business Administration (SBA) debentures per fund. SBIC Fund II shares the same investment strategy and will invest alongside Star Mountain’s other direct investment funds, leveraging the scale and resources of the entire 130+ person firm, which is one of the largest independent teams in the U.S. dedicated to the lower middle-market.
Like SBIC Fund I, SBIC Fund II will make strategic debt and equity investments in established, recession-resilient and low market-correlated service-oriented U.S. small and medium-sized businesses, supported by strong legal agreements and maintenance covenants. SBIC Fund II has increased the number of strategic commercial bank partnerships Star Mountain has with several additional bank limited partners (LPs) coming into this fund. Star Mountain’s distinctive “Enterprise Value Optimization Program” including its “Getting Middle-Market Ready” process is an attractive aspect for top performing private businesses to tap into Star Mountain’s resources and relationships to grow.
Star Mountain has economic alignment with investors that investors and business owners value as 100% of full-time employees share in the investment profits. Star Mountain has team members in 20+ cities nationwide and a leadership team with experience from Goldman Sachs, Fortress, Columbia Threadneedle, Citigroup and other leading institutions, with private credit and equity experience dating back to the 1980s.
Star Mountain believes that positive market trends continue to support this strategy, including the aging demographic of business owners looking for strategic capital partners, valuation arbitrage between smaller and larger businesses, a fragmented market of ~200,000 established smaller U.S. private businesses, and a lack of sophisticated strategic capital for smaller companies.
“We are grateful for the partnership with the SBA, our investors, our team and our portfolio companies, and we remain highly aligned and committed to continue to grow the value we can bring to all stakeholders,” said Brett Hickey, Founder & CEO of Star Mountain Capital. “We are proud to work with the SBA in our aligned missions of supporting high quality small and medium-sized private businesses which are the backbone of the U.S. economy.”
“We are honored by the trust that the sophisticated group of commercial banks, family offices and individual investors have placed in us, and we are excited about the continued opportunities ahead for our funds, our portfolio companies and our valued LPs,” said Ryan McGovern, Managing Director & Investment Committee Member.
As a Volcker-exempt vehicle, SBIC funds allow banks to invest as LPs where they may receive Community Reinvestment Act (CRA) credits and additional opportunities to provide banking services to SBIC fund portfolio companies with SBIC funds able to potentially assist bank corporate clients with financing needs.
Star Mountain was advised by Winston & Strawn LLP and Stifel, Nicolaus & Co., Inc.
About Star Mountain Capital
With ~$4.5 billion in AUM (committed capital including debt facilities as of 1/31/2026), Star Mountain specializes in providing scalable and data-driven investment solutions across two core strategies:
- Direct Investments: Providing debt and equity capital to established lower middle-market businesses.
- Secondary Investments: Acquiring LP interests, direct assets and making primary LP commitments.
Star Mountain’s investors include public and private pensions, insurance companies, commercial banks, endowments, foundations, family offices and high-net-worth individuals. Employee-owned and sharing profits with 100% of its U.S. full-time employees, the firm prioritizes alignment of interests to maximize value for stakeholders.
Since 2010, Star Mountain has completed over 100 direct platform investments and over 50 secondary/fund investments in the North American lower middle-market. The firm has been consistently recognized as one of the Inc. 5000 fastest-growing private companies and a Best Place to Work by both Crain’s New York Business and Pensions & Investments.
For more information, visit www.starmountaincapital.com.
Legal Disclaimer:
This press release does not constitute an offer to sell or a solicitation of an offer to purchase interests in any investment product. Awards and recognitions by third-party rating agencies, companies or publications should not be interpreted as a guarantee of future results or performance. They should not be considered as an endorsement, recommendation or referral of Star Mountain Capital or its representatives by any client or third party. Rankings published by media and industry organizations are based on information provided by the recognized advisor. Additionally, readers should understand that past performance is not indicative of future results. Award descriptions and selection methodologies may vary.
Note: Past performance does not guarantee future results. This is not an offer for investment in any product and investment in any product managed by Star Mountain Fund Management, LLC is subject to such product’s legal documentation and private placement memorandum. 100% employee-owned firm includes employee estate planning vehicles.
Awards and Recognition Disclosure:
Star Mountain Capital’s awards and recognitions are based on third-party evaluations and criteria, which may be subjective. These honors do not imply a guarantee of future performance or an endorsement by current or past clients.
Ranking Methodologies:
- Crain’s Best Places to Work: Evaluations were conducted through a two-part process, assessing workplace policies, practices and employee satisfaction via surveys. Participation required a fee solely for survey processing purposes. More details are available at Crain’s eligibility criteria.
- Pensions & Investments Best Places to Work: Companies were evaluated based on surveys measuring employee engagement (75%) and employer policies (25%). Participation required a minimum of 20 U.S. employees and $100 million in discretionary assets under management. Further details can be found at P&I eligibility criteria.
- Inc. 5000 Rankings: Companies were ranked based on revenue growth from 2019 to 2022. To qualify, firms had to be U.S.-based, privately held and independent, with revenue thresholds of at least $100,000 in 2019 and $2 million in 2022. More details are available at Inc. 5000 criteria.
Contacts
Media Contact:
John Polis – [email protected]
