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US firm to launch first ever exclusively Hispanic private equity fund

Chicago-based Hispania Capital Partners has launched the first national venture capital fund investing exclusively in Hispanic businesses. The fund is seeking to invest in excess of $70m.

The private equity fund evolved from a 2000 alliance of the US Hispanic Chamber of Commerce and America's sixth largest bank, Bank One. Hispania is seeking to invest between $4m and $8m in manufacturing, service and technology businesses that Hispanics own or manage or that serve Hispanic communities.

The fund is licensed by the Small Business Administration (SBA), which entitles it to guaranteed financing of up to twice the amount of private equity capital it raises. Hispania has raised $21m of funding so far and will therefore be supported by up to $42m of SBA leverage.

Bank One committed a cornerstone investment of $5m and also assisted in recruiting additional investors, including the largest limited partner, Verizon Communications, credit card issuer MBNA and US bank Wells Fargo.

Though Hispania is a national fund, it expects to focus on businesses in California, Florida, Illinois, New York and Texas, which have large Hispanic populations, according to a report by Reuters.

‘We see tremendous opportunities to provide capital growth equity to Hispanic businesses, which have historically struggled to get enough capital,' said Carlos Signoret, co-manager of the fund. ‘This fund will help larger companies achieve the kind of rapid growth that would otherwise be impossible.'

Hispanic businesses currently employ more than 1.3m workers and generate revenues of over $180bn. Over the next five years the Hispanic population is projected to grow five times faster than the overall US population.

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