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Latin Businesses Get Own VC Fund


May 17, 2003
Copyright © 2003
THE MIAMI HERALD. All rights reserved. 

Hispanic business owners have a new financing source to tap: Hispania Capital Partners, a $70 million venture-capital fund.

The Chicago-based fund, which started operating last month, will make investments of $4 million to $8 million in mid-sized businesses owned or managed by Hispanics.

''Most private equity funds focus on an industry. We identified a rapidly growing niche, and that's where we're putting our money,'' said fund manager Victor Maruri.

``Hispanic businesses are growing at three times the national average, and many of them are reaching a critical size.''

Hispania, an outgrowth of an alliance between Chicago's Bank One and the U.S. Hispanic Chamber of Commerce, is specifically seeking mid-market manufacturing, service and technology companies with annual sales of $10 million to $20 million.

Other criteria include experienced management, good long-term growth prospects, and competitive products or service. Hispania is seeking a return on investment in three to five years.

The fund is also licensed by the federal government's Small Business Administration as a ``small business investment company.''

That means the SBA will also invest in a company chosen by the fund, doubling the fund's investment.

The fund's largest investor is Verizon Communications, most of the others are financial institutions such as Bank One, MBNA, Wells Fargo, JPMorganChase, Citibank, Lasalle Bank and Key Bank.

Maruri said he's seeking more investors, to reach $100 million by year-end. ''It's a tough environment out there, but I'm confident that we'll make it,'' he said.

Hispania is already evaluating about 10 investment opportunities, including several from South Florida. ''That will be a big market for us,'' he said.

Bank One, which underwrote the fund's startup costs and contributed $5 million to the fund, said Hispania is a key component of the bank's Hispanic marketing strategy.

''The perception is that Hispanic businesses are small and don't have the same growth potential as other businesses,'' said Francisco Menchaca, business banking marketing director. ``There are Hispanic businesses that have good growth potential.''

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