North Carolina Private Equity Firms

Private equity firms in North Carolina

Find Venture Debt has compiled a list of the top 36 private equity firms, growth equity funds, and mezzanine lenders with offices in North Carolina listed by city. Charlotte has the most firms and Raleigh is second. We did not include venture capital firms because their investment criteria and strategies are very different than private equity. Click on each firm's name to go to their website.

Please contact Find Venture Debt if you have questions, corrections, or additions to the list of North Carolina firms.

What is a private equity firm?

Private equity firms manage investment funds that are not publicly-traded. The funds are usually organized as limited partnerships. The private equity firm is the general partner and is responsible for the management of the fund, and the limited partners provide most of the capital. The limited partners include institutional investors (e.g. pension plans, university endowments, insurance companies, foundations, sovereign wealth funds), family offices, and high-net-worth individuals.

Private equity funds invest in a broad range of assets including private companies, public companies, real estate, natural resources, and infrastructure projects. In practice, private equity is defined more narrowly to focus on investments in private companies. Even within this narrower definition, private equity firms vary widely in size, industry focus, and investment strategy.

Private equity vs. venture capital

Technically, venture capital is a subset of private equity. In practice, venture capital is considered a separate asset class.​ However, there are investments funds that blur the difference between private equity and venture capital; this middle ground is often referred to as growth equity (or growth capital). Below is a very brief explanation of the differences among these equity asset classes:

  • Venture capital - Includes equity investments in companies that are at an early stage of development. Generally, the companies are not profitable, so they need to raise additional capital every 12 to 24 months to finance their operations and growth. For most of these companies, market demand for their product or service is uncertain and management's ability to successfully execute their strategy is also uncertain so they are "high risk, high potential reward" investments. Typical industries include life sciences, information technology, and e-commerce. Typically, a venture capital firm will acquire a minority interest in a company; however, since more than one venture capital firm will often invest in a given company, collectively they may own a majority.

  • Growth equity (or growth capital) - Includes equity investments in companies that have achieved good "product-market fit", are rapidly growing, and need to fund working capital, capital expenditures, and/or acquisitions. Growth capital is considered less risky than venture capital and is sometimes called late-stage venture capital. Typical industries are the same as venture capital, as well as those more commonly associated with private equity. Growth equity investors usually acquire a minority interest, but some prefer a majority interest. For more information regarding growth debt, see our overview of venture debt.
  • Private equity - Includes equity investments in established, profitable companies. Historically, this was called the "leveraged buyout" asset class, but that term has fallen out of favor due to its association with excessive debt and ruthless cost-cutting. Private equity investors continue to utilize debt but as a much smaller percentage of the capital structure, and most firms focus on building value through revenue growth and operational improvements rather than cost-cutting. Typical industries include manufacturing, distribution, business services, healthcare, and consumer products & services; in recent years, private equity funds have significantly increased their investment in the software and technology sectors. Generally, private equity firms prefer to acquire a majority interest in a company. As competition for acquisition opportunities has increased, an increasing number of firms have shown a willingness to acquire minority interests.

What is mezzanine financing?

​Mezzanine financing has characteristics of growth equity and private equity. It is a source of expansion capital and the investors prefer established, profitable companies. However, it is usually structured as debt rather than equity, so it is part of the private debt asset class rather than private equity. Investment structures include the following (in descending order of frequency):

  • Subordinated debt, with investors receiving an "equity kicker" in the form of warrants to purchase common stock;
  • Subordinated debt plus a smaller amount of preferred equity;
  • Preferred equity without debt; and
  • Convertible debt.

From a capital structure perspective, mezzanine debt fills the gap between debt and equity, the word "mezzanine" is derived from the Latin word for "middle." When a private equity firm acquires a company, a common financing structure uses equity from their limited partners, senior debt from a bank or non-bank lender, and a middle layer from a mezzanine lender.

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