Gainline Capital Partners LP, a value-oriented private equity firm that invests in U.S.-based lower middle-market companies, today announced the successful close of its $400 million second fund, Gainline Equity Fund II LP. Gainline had targeted $300 million for this fund with a hard cap of $400 million. The $400 million closing marks a 258% increase in the size of Fund II over Gainline Equity Fund LP, which closed in 2019.
Despite a challenging fundraising environment, especially for emerging managers, Gainline was oversubscribed for Fund II, with strong limited partner (LP) endorsements. The fundraise benefited from broad institutional support, with every institutional investor from Fund I returning to invest in Fund II and a variety of new institutions joining the LP base.
Gainline has already deployed $106 million in two Fund II investments; the firm had an initial, early close of Fund II, in the fall of 2021, to take advantage of a timely opportunity to expand the Galaxy Universal investment platform. With the final closing of Fund II, Gainline now has $1.3 billion of assets under management across its two funds along with investor and management co-investments.
“We are thrilled and fortunate to have the continued support of such a distinguished group of limited partners coupled with new, well-known, well-regarded partners, many of whom had been tracking our progress through the deployment of Fund I,” said Allan Weinstein, Gainline’s co-founder and managing partner. “It is a powerful endorsement of our investment strategy.”
Through Gainline’s second equity fund, the firm will continue the same first institutional capital-focused investment strategy it employed in its previous fund. Led by co-founders Weinstein and Rick Sullivan, Gainline targets high-quality, fundamentally sound businesses that have proven business models, stable and mature revenue bases, prospects for substantial returns, and which stand to benefit from Gainline’s hands-on management approach to creating value. Gainline specializes in first institutional capital opportunities and businesses where the quality of the financial sponsor partnership is the primary motivation for owners to transact.
“We have quickly become a partner of choice for founders, entrepreneurs, and family businesses who are prioritizing partnership,” said Sullivan. “We continue to find exciting opportunities where business owners are recognizing the importance of collaboration, thoughtful alignment, and the merits of building long-term value appreciation with an experienced sponsor. The transition of a closely held or family business or a carve-out into a strong stand-alone institutional quality investment requires deep experience. Our success is a function of our transparent working environment and commitment to fostering a team culture of sound and reasoned judgment, technical proficiency, and thoughtfully aligned partnerships.”
Credit Suisse acted as placement agent for Gainline Equity Fund II LP and Willkie, Farr & Gallagher LLP provided legal counsel.
About Gainline Capital Partners
Gainline Capital Partners LP is a value-oriented private equity firm that invests in U.S.-based lower middle-market companies. The firm invests in profitable companies prioritizing first institutional capital partnership opportunities, helping execute management teams’ vision, driving sustainable growth, and creating long-term value.
