Investors

About Us

Hark Capital is an innovative provider of financial solutions for sponsors and their portfolio companies. Employing its branded Arch Note, Hark Capital provides non-dilutive loans to the portfolio companies of sponsors in situations that would typically require equity. The loans are based on the sponsor’s NAV, not the credit profile of the individual portfolio company.

Since 2013, we have completed over 30 investments working with private equity funds, distressed PE and growth equity / VC firms.

Hark Capital is an Enhanced Capital fund.

Approach

Sponsor Uses

Defensive Situations

  • Support operating losses for companies in turnaround
  • Refinance debt in default
  • Delever opco via holdco debt
  • Bridge to intermediate-term sale or refi
  • Free up uncalled capital commitments pledged to capital call lines

Growth Situations

  • Non-dilutive capital for growth equity
  • Finance 100% of tack-ons with debt
  • Capital for LP distributions in older funds
  • Win founder-owned companies: lever your investment, not the operating company

Intermediary Uses

  • Fill “equity hole” in challenging capital raises with flexible, non-dilutive debt
  • Increase speed and certainty of closing
  • Obtain incremental holdco leverage to facilitate buy/sellside M&A transactions

How we do it

  • Loan to portfolio company supported by unsecured fund-level guaranty
  • Flexible loan structure: can be at either at the Operating Company (Holdco, Senior or Subordinated) or at the Fund Level
  • Guaranty based on NAV
  • Covenant-lite for borrower and limited call protection
  • Partial PIK interest
  • Not a GP Guaranty

Typical Terms

  • Target Investment Size: $5–80 million
  • Maturity: 1 to 5 years
  • Borrower: Fund or Portfolio Company
  • Loan Type: Holdco, Senior or Subordinated
  • Target Coupon: ~10% (cash + PIK)
  • Amortization: None
  • Financial Covenants (Portfolio Company): None
  • Negative EBITDA: Permitted
  • Industry: Any
  • Guarantor: PE, Distressed PE and Growth Equity / VC

Team

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Contact

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New York

601 Lexington Avenue55th FloorNew York, NY 10022

212.207.3385

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New Orleans

201 St. Charles AvenueSuite 3400New Orleans, LA 70170

504.569.7900

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