Dallas’ Capital Southwest and Phoenix’s Trinity Capital Form $100M Joint Investing Venture » Dallas Innovates

Dallas-based middle market lending firm Capital Southwest Corporation and Phoenix’s Trinity Capital  have formed a joint venture that will invest primarily in first-out senior secured debt opportunities in the lower middle market.

The joint venture will be owned equally by Capital Southwest and Trinity Capital, with each firm committing $50 million and holding a 50% equity interest, the companies said. With equal representation from the two partners, the joint venture’s board of managers will oversee investment and operational decisions. The companies said that they expect the joint venture to obtain leverage through a senior-secured credit facility, with borrowings used to fund portfolio investments.

“We’re excited about the opportunity to partner with Trinity Capital and believe this vehicle will enable Capital Southwest to compete across a broader spectrum of investment opportunities,” said Capital Southwest CEO Michael Sarner.

“We expect this joint venture with Trinity Capital to enhance CSWC’s ability to compete for and win high-quality lower middle market opportunities by providing more flexible capital solutions, all while maintaining portfolio granularity and expanding the range of platform companies we can pursue,” Sarner added in a statement.

Kyle Brown, CEO of Trinity Capital, said, “We believe this joint venture meaningfully enhances Trinity Capital’s ability to diversify our portfolio into the lower middle market and further expands our managed funds business, all for the benefit of our shareholders. We’re excited to partner with a highly credible firm like Capital Southwest, and we believe this JV positions both firms to be very competitive across a broader opportunity set in the lower middle market by combining disciplined credit underwriting with flexible capital solutions.”

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