CNL Financial Group has launched CNL Strategic Capital LLC, a $1.1 billion limited liability company that plans to acquire controlling equity stakes and loan positions in middle-market businesses. The company’s registration statement was declared effective by the SEC yesterday.
According to the prospectus, CNL Strategic Capital plans to target durable and growing businesses that are highly cash flow generative with annual revenues of primarily between $25 million and $500 million.
The company seeks to raise up to $1.1 billion in capital over two years, selling four classes of shares in the publicly registered, non-traded offering. These include Class A, Class T, Class D, and Class I shares.
Class A shares are initially priced at $27.32 each and include a maximum 6.0 percent selling commission and 2.5 percent dealer manager fee.
Class T shares are initially priced at $26.25 each and include a maximum 3.0 percent selling commission, a 1.75 percent dealer manager fee, and a 1.0 percent annual distribution and shareholder servicing fee paid to the managing dealer. The servicing fee will begin accruing no later than the end of June 2018.
Class D shares are priced at $25.00 each and have no selling commissions or dealer manager fees, and include a 0.50 percent annual distribution and shareholder servicing fee.
Class I shares are priced at $25.00 each and have no selling commission, dealer manager fees, or annual distribution and shareholder servicing fees.
Class A and Class T shares are available for purchase through different distribution channels, while Class D and Class I shares are only available to investors purchasing through certain registered investment advisers and fee-based broker-dealer or advisory platforms. The shares have an initial minimum purchase amount of $5,000.
CNL Strategic Capital is managed by an affiliate of CNL and sub-managed by an affiliate of Levine Leichtman Capital Partners, an investment management firm. CNL Securities Corp. serves as the managing dealer of the offering.
As of February 8, 2018, CNL Strategic Capital raised gross proceeds of approximately $81.7 million in a private offering of Class FA shares, which satisfied the minimum offering requirement for this offering of $2.0 million. Class FA shares are not available for purchase in the public offering.