Jeffery Sweeney, CEO and managing director, US Capital Partners, ACG Los Angeles

Our Business at US Capital Partners grew about as expected and seems to be not correlated with the general economic trends, at least as reported in the popular media. This is due to our market segment in small cap and lower middle market debt financing which is under served generally.

Deal activity was stronger than anticipated considering that borrowing in general was considered weak. Although we have a specialty in credits for smaller and lower middle market companies. The credit markets are quite fragmented in this space and are not quite as efficient as the middle market, so there more opportunities for those who know what they are doing here and can reach the borrowers.

I generally expect market conditions to improve. I think we have gotten most of the bad news this year dragging the general US and world economy. The election year will bring frantic pump priming as usual although it should have been in full swing by now. Additionally the Euro zone will probably have its finance issues worked out by the end of this year and take whatever painful hit in 2011 so the deck is clear for growth in 2012.

Saif Mansour, managing partner, Breakwater Investment Management, LLC, ACG Los Angeles

Breakwater saw 2011 overachieve our expectations. In terms of results and deal activity the year produced more than anticipated in our focus market of providing growth capital to lower middle market and small businesses. There is a growing need for capital to support growing businesses, especially as traditional commercial banks continue to restrict their lending capacity to this smaller market segment. This has produced a growing void and hence opportunity for alternative investment firm such as Breakwater that has flexibility to support growth capital initiatives. 

Deal activity was certainly higher than we expected. Small and lower middle market enterprises are seeing more opportunities to hire new staff, expand to new markets, and develop new products with access to working capital to support this growth. As an alternative provider of debt for growth purposes, Breakwater is experiencing high deal activity volume given our flexibility to compliment the restrictive lending requirements of traditional bank financing.

I don’t expect a growing need for working capital and growth capital for small and lower middle market businesses to subside any time soon. The opportunities continue to be apparent despite the depressed state of the greater economic and political climate.