First Capital Real Estate Investments, a real estate investment company and sponsor of non-traded direct investment programs, has acquired Freedom Capital Investment Management in exchange for a secured promissory note payable over time, according to a filing with the Securities and Exchange Commission. The transaction closed last week.
Freedom Capital Investment Management launched a $500 million non-traded business development company called Freedom Capital Corporation in 2015 and billed itself as an investment manager geared towards conservative-minded investors with a politically oriented investment philosophy.
Freedom Capital Corporation, which is now known as First Capital Investment Corporation, struggled to raise equity and in December 2016, UMB Bank terminated its original custody agreement with the BDC. In February, the company broke escrow and commenced operations. Democracy Funding LLC, the offering’s dealer manager, was also sold to First Capital.
Pat Clemens will replace Jeffry McClure as president and CEO of First Capital Investment Corporation and will focus on sourcing, structuring and managing the company’s investments. He previously served as an investment management professional for Dallas-based Revere Capital, a private credit fund, and before that, he served as managing director of investment management at White Oak Global Advisors, a private credit investment management fund. Clemens has also held positions at GE Capital, CIT Group, Silicon Valley Bank and Union Bank of California.
Liam Coakley, David Duhamel, Keith Hall and Steven Looney resigned from the board, and were replaced by Suneet Singal, Bob Froehlich, and Frank Grant.
Singal is the CEO and founding principal of First Capital Real Estate Investments, as well as the CEO and chairman of the company’s non-traded REIT, First Capital Real Estate Trust. He will serve as chairman of the BDC.
Froehlich has chaired investment committees for multiple global asset management organizations, including Deutsche Bank, Hartford and Kemper Funds. He has also served on the boards of numerous companies, including two AR Global-sponsored non-traded REITs, where he publicly resigned last year after accusing the companies of harboring serious conflicts of interest.
Grant, who also sits on the First Capital REIT board, is a managing director of Interstate Venture Capital. He has served as a partner with Stradling, a business law firm, and was previously senior counsel at international law firm, Perkins Coie LLP.
First Capital Investment Corporation invests in private U.S. small- and middle-market companies and currently has one unsecured $1.5 million loan in affiliate First Capital Retail LLC. The company has raised approximately $6.1 million in investor equity.