Star Mountain Capital, LLC, the New York City-based employee-owned investment firm, has successfully closed its second Small Business Investment Company (SBIC) fund, raising $286 million.
The fund, which follows the firm’s first SBIC vehicle, will focus on providing capital to U.S. small and medium-sized businesses with strong growth potential and resilience against economic fluctuations.
A Diverse Investor Base Backs the Fund
The fund’s investors span a wide range of institutions, including public and private pensions, insurance companies, commercial banks, endowments, foundations, family offices, and high-net-worth individuals.
Like its predecessor, SBIC Fund II benefits from the full $175 million of Small Business Administration (SBA) debentures, a hallmark of the SBIC program that enhances the firm’s ability to deploy capital efficiently across multiple deals.
Strategic Investment Approach
SBIC Fund II will operate alongside Star Mountain’s other direct investment vehicles, leveraging the firm’s robust resources and 130+ person team.
The fund’s strategy emphasizes both debt and equity investments in established, service-oriented businesses in the U.S.
These target companies are typically recession-resilient, have low market correlation, and are supported by strong legal agreements and maintenance covenants to safeguard investor interests.
Leadership and Expertise
Founded and led by Brett Hickey, Star Mountain Capital specializes in scalable, data-driven investment solutions across two primary strategies:
Direct Investments: Providing debt and equity capital to established lower middle-market companies.
Secondary Investments: Acquiring LP interests, direct assets, and making primary LP commitments in other funds.
Since its inception in 2010, the firm has completed more than 100 direct platform investments and over 50 secondary or fund investments in the North American lower middle-market, building a reputation for disciplined and effective capital deployment.
AUM and Market Presence
Star Mountain currently manages approximately $4.5 billion in assets, reflecting its substantial footprint in the lower middle-market investment space.
With SBIC Fund II, the firm aims to continue supporting resilient and growth-oriented U.S. businesses while offering attractive returns to its diverse investor base.
What’s Next?
With Fund II now closed, Star Mountain Capital is set to deploy capital across new debt and equity opportunities.
Investors can expect the firm to focus on service-oriented businesses with stable cash flows and scalable operations.
The combination of SBA debentures, legal protections, and the firm’s extensive experience positions SBIC Fund II to make impactful investments in the lower middle-market over the coming years.
Summary
Star Mountain Capital has closed its $286 million SBIC Fund II, supported by a broad mix of institutional and high-net-worth investors.
Leveraging SBA debentures, the firm will continue investing in recession-resilient, service-oriented lower middle-market businesses.
Led by Brett Hickey, Star Mountain brings over a decade of investment experience and $4.5 billion in assets under management, positioning Fund II to capitalize on strategic debt and equity opportunities across the U.S.
