Chidem Kurdas
When people look for investment areas that are not crowded, one possibility is small business development. Few investors have the required expertise or patience. Certain geographies are more underserved than others in this respect and hence offer greater opportunity.
A few private equity and hedge funds specialize in small firms and regions that don’t get attention from big financial players. Often the managers and their investors are connected to those areas.
Thus the Iowa Corn Growers Association is setting up a fund to take advantage of attractive financing transactions in Middle America.
A local venture capital and private equity firm, AAVIN Equity Advisors in Cedar Rapids, Iowa, will manage the fund. Jim Thorp is the managing partner.
The fund will concentrate on businesses in the upper Midwest and target average investment per company of $3 million to $4 million, primarily in privately-issued stock, convertible debt and warrants. AAVIN has long experience in the niche.
This part of the country is believed to be underserved by venture capital and private equity funds relative to the number of deals available. Hence the terms are often more attractive for finance providers.
The investment program is only for members of the Iowa Corn Growers Association and other state corn growers’ associations. Incidentally, the fund will invest in agricultural products as well as other industries.
HedgeFundSmarts 