image descritpion

Publications
& Insights

Resources created and curated to support the growth of impact investing, for those new to the field and for experienced practitioners.

ImpactAssets 50 Help Topics
Filtering:
Use the filter categories on the left to narrow down your results. You can switch years via the dropdown menu. The numbers next to each filter represent the number of results available given your current selection. If you'd like to start over, simply click the 'Reset All Filters' link.
Sorting:
Use the dropdown menu found in the top right to arrange your current set of results. Select your preferred sorting option and wait for the results to refresh.
Printing:
Use the print button to print the current page contents. This works for both the summary view and the full Fund Manager detail view.
ImpactAssets 50: A Global Landscape of Impact Investment Fund Managers
The ImpactAssets 50 (IA 50) is the first open-source, publicly published database of experienced private debt and equity impact investment fund managers.
https://www.impactassets.org/impactassets-50

ImpactAssets 50

An Annual Showcase of Impact Investment Fund Managers

HCAP Partners

Total Assets Under Management: $51 – 99MM
Asset Class: Private Debt - Absolute Return / Notes, Public Equity
Geographic Focus:
Impact Investment Focus:
Nutrition, Health and Wellness
Small and Medium Business Development

Firm Overview

Category: Mezzanine Finance
Founded in 2000, HCAP Partners ("HCAP") is a private equity firm focused on the lower middle market. HCAP seeks to generate above market rate returns while facilitating a positive impact in underserved businesses, their employees, and their communities. HCAP is currently operating two institutional limited partnerships and is investing its latest institutional fund, HCAP Partners III, L.P. HCAP generally invests in established lower middle market businesses generating between $10M-$100M in revenues across a select group of industries. Investments are typically structured as mezzanine debt and preferred equity securities and are used to finance growth, acquisitions, buyouts, and recapitalizations with investments ranging between $2M and $10M. HCAP's impact intentionality is operationally focused and based around creating high quality jobs using a framework called The Gainful Jobs Approach. HCAP measures job quality standards at the time of investment and works with portfolio company leadership to build and implement strategic roadmaps with the intent of improving job quality and measurable outcomes for employees.  
Firm Headquarters: US & Canada
Years of Operation:
Total Assets Under Management:
$51 – 99MM
Total Number of Investors: More than 25
% of Capital from Top 3 Investors: Less than 25%
Investment Thesis:
HCAP aims to invest the majority of its capital in companies underserved by traditional capital sources, including those companies located in low and moderate income areas ("LMIs") and companies employing individuals residing in LMI areas or earning LMI wages.
 
Investment Overview:
HCAP's investment strategy focuses on building a diversified portfolio across a number of key sectors including manufacturing, healthcare, business services, and IT services/software, taking into consideration company size, historical and projected performance, and transaction structure. HCAP aims to invest the majority of its capital in companies underserved by traditional capital sources, including those companies located in low and moderate income areas ("LMIs") and companies employing individuals residing in LMI areas or earning LMI wages. HCAP seeks to invest into small businesses with $10M-$100M in revenue, $1M-$5M in EBITDA, and $2M-$10M in capital requirements. Investments will typically be structured in the form of loans and, under certain circumstances, HCAP will consider making opportunistic structured equity investments of up to approximately 25% of deployed capital. Funds will generally be used for growth-oriented working capital, recapitalizations, acquisition of another company, or capital investment.     

Investment Example

Founded in 2008, Arizona-based Cubex provides clients in the medical and veterinary markets with an automated medication dispensing system. The system helps accurately dispense medication, supports pharmacy workflows, and drives clients' adherence to regulatory requirements. HCAP invested growth capital in 2014 that has helped support job creation at the company resulting in a doubling of headcount to 64 employees. In addition, HCAP implemented its Gainful Jobs Approach to understand the existing workplace practices and worked with management to develop a tailored strategic roadmap including actionable steps in an effort to improve job quality standards. Since time of our investment the Cubex team has implemented the following workplace practices:
  • Implementing a broad based profit sharing program and stock option plan
  • Formalizing education benefits
  • Instituting career road mapping
  • Expanded flexible work schedules
  • Expanded diversity hiring
  • Implemented wellness initiatives
The HCAP team works actively with our portfolio companies to implement their strategic roadmaps.

Leadership and Team

Cumulative Leadership Experience in Investing:
More than 30 years
Cumulative Impact Experience of Top Three Firm Leaders:
More than 30 years
Tim Bubnack – Managing Partner More Info

Tim Bubnack joined HCAP Partners in June 2007 and has more than 17 years of lending, technology investment and financial experience. Prior to joining HCAP, Tim spent five years with Silicon Valley Bank as Managing Director of commercial banking activities in the San Diego region where he managed early stage and middle market banking relationships in the technology, communications and biomedical industries. Prior to joining Silicon Valley Bank in 2002, he served in senior executive positions at Comerica Ventures, Inc. and Comerica Capital Advisors where he was responsible for identifying and assessing direct equity investments and investments in venture funds. Tim also made loans in partnership with the Technology and Life Science Division of Comerica Bank. At Comerica Bank he was part of the founding team of the company's Southern California Emerging Growth Division.

Frank Mora – Partner More Info

Frank joined HCAP Partners in February 2013, and is responsible for originating, structuring, closing and monitoring portfolio investments. Prior to joining HCAP Partners, Frank was with DBI Capital, a Southern California based lower middle market private equity buyout group. Frank joined DBI in 2006 where he was responsible for sourcing and structuring investment transactions, including co-investments into two Huntington portfolio companies. Before joining DBI, Frank was a Vice President in the Fixed Income Capital Markets team at Citigroup specializing in Private Placements. Prior to joining Citigroup, he was an officer in the Venture Capital team within the Economic Development Bank for Puerto Rico.

Percentage of Investment Professionals who are Women and/or Under-Represented Groups in Firm's Geographic Focus:
More than 50%
Percentage of Board Members who are Women and/or Under-Represented Groups in Firm's Geographic Focus:
More than 50%

Financial Performance

Target Financial Returns Relative to Benchmark:
Above Market Rates
Actual Performance Relative to Target Financial Returns in the Past Three Years:
In line with initial target returns
Financial Reporting Frequency to Investors or Donors
Quarterly

Impact Performance

Percentage of Total Assets Under
Management that are Impact Investments:
75% – 99%
Primary Impact Outcomes:
Alleviating poverty
Creating jobs
Increasing access to financial services
Increasing access to healthcare services and improving health
Value-added Services Offered:
Access to markets
Business and legal training

Investments systematically include social and environmental sustainability practices in the due diligence process:
HCAP seeks to provide capital to "underserved" businesses that tend to employ low-to-moderate income and ethnic minority employees, are located in LMI zones, and/or are owned and operated by ethnic minorities. Since inception, 83% of capital invested in HCAP Partners III has been in underserved businesses illustrating our commitment to source and invest in deals which align with our impact focus. In addition confirming value alignment with management teams during the diligence process, HCAP also conducts a detailed analysis of workplace practices of prospective investments. HCAP also includes language in its term sheets and reporting requirements around participation in our impact initiatives to further align our impact focus with our invested capital.

Impact Tracking and Monitoring

Impact is Tracked:
Yes
Social and/or Environmental Impact is Reported to Investors and Donors:
Yes – to the public
Third Party Validations:
Participant on steering committees or leadership roles within impact industry associations
Publisher or contributor to industry white paper or other research in impact investing

Learn More

Key Contact Name: Bhairvee Shavdia
Phone: (858) 259-7654
Mailing Address:
3636 Nobel Drive, Suite 401, San Diego, CA 92122

Ready for the next step?

Impact investments are investments made into organizations and funds that generate measurable social and environmental impact as well as financial returns.