IMPACTASSETS 50™
An Annual Showcase of Impact Investment Fund Managers
ImpactAssets 50
An Annual Showcase of Impact Investment Fund Managers
HCAP Partners
Diversity, Equity and Inclusion
Health and WellbeingFirm Overview
HCAP Partners is a provider of mezzanine debt and private equity for underserved, lower middle market companies throughout California and the Western United States. As a nationally recognized impact investor, the firm actively works to set industry standards as a mission-driven fund manager. HCAP Partners provides creative debt and equity structures to serve the needs of the lower middle market, which are attractive to closely held companies and private equity firms seeking a collaborative, non-control, institutional investor. Through active engagement with its portfolio, the team at HCAP Partners provides value-added resources such as operational and financial guidance, capital raising, and strategic exit planning. Through its Gainful Jobs Approach™, the firm works to facilitate a positive impact on underserved businesses, their employees, and their communities.
Years of Operation: 10 years or more
% of Capital from Top 3 Investors: Less than 25%
HCAP invests capital in lower middle market companies primarily located in the Western United States which are underserved by traditional capital sources, including those companies located in low and moderate income areas (LMI) and companies employing individuals residing in LMI areas or earning LMI wages.
HCAP Partners' investment strategy focuses on building a diversified portfolio across a number of key sectors including manufacturing, healthcare, business services, and IT services/software, taking into consideration company size, historical and projected performance, and transaction structure. HCAP aims to invest the majority of its capital in companies underserved by traditional capital sources, including those companies located in low- and moderate-income areas (LMI) and companies employing and retaining jobs for individuals residing in LMI areas or earning LMI wages. HCAP seeks to invest into small businesses with $10M-$100M in revenue, $1M+ in EBITDA, and $3M-$25M in capital requirements. Investments will typically be structured in the form of loans and, under certain circumstances, HCAP will consider making opportunistic structured equity investments of approximately 30% of deployed capital. Funds will generally be used for growth-oriented working capital, recapitalizations, acquisition of another company, or capital investment.
HCAP Partners differentiates itself from its peers by working diligently towards its longstanding commitment to creating and preserving quality jobs and through its proprietary impact framework, the Gainful Jobs Approach™. HCAP actively engages with its portfolio companies to improve job quality standards with a focus on economic opportunity, which includes broad-based participation, opportunities for advancement, and sustainable livelihood, as well as health & wellness, which includes paid sick days and wellness initiatives. HCAP assesses job quality standards at the outset of the investment and works with company management to create and implement a roadmap for job quality improvements which are tracked and measured regularly throughout the investment. HCAP is also an industry leader in building a scalable, real-time software dashboard that provides meaningful data to portfolio companies which they can use to make informed decisions around improving job quality and an enhanced impact measurement and reporting functionality for Limited Partners.
Investment Example
AMFM Healthcare provides behavioral and mental health services. HCAP’s Gainful Jobs Approach helped improve its job quality: o Enhanced governance and channels for employee feedback: created supervisor positions to assist caregiving staff. Supervisor positions staffed through internal hiring, creating a pathway of advancement. o Increased starting pay for caregiving staff, implemented formalized performance review process including standardized guidelines for salary increases. o “Hero Pay” for caregiving staff during the pandemic, annual self-care day to highlight the emphasis company places on employee well-being. o Crisis Prevention Institute’s Non-Violent Crisis Training for caregivers to support staff navigating challenging situations. o DEI initiative based on employee feedback. Company hired Dr. Gloria Morrow who has worked closely with the King Center in Atlanta and the Martin Luther King, Jr. Advisory Council. She shared the “Beloved Community” framework and assisted AMFM in developing a cultural competency training now included in new staff onboarding process.
Leadership and Team
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Tim Bubnack – Managing Partner More Info
Tim Bubnack joined HCAP Partners in June 2007 and has more than 25 years of lending, technology investment, and financial experience. Tim is currently representing HCAP Partners as a Board Director for RPI, Cubex Systems, and AMFM Healthcare and is a Board Observer for Lone Star Analysis and TCS Healthcare. Prior to joining HCAP, Tim spent five years with Silicon Valley Bank as Managing Director of commercial banking activities in the San Diego region where he managed early stage and middle market banking relationships in the technology, communications and biomedical industries. |
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Frank Mora – Partner More Info
Frank joined HCAP Partners in February 2013, and is responsible for originating, structuring, closing and monitoring portfolio investments. He is currently a board observer or actively involved in PriMetrica, Burke Williams, eLearning Brothers, and Veyo. Prior to joining HCAP Partners, Frank was with DBI Capital, a Southern California based lower middle market private equity buyout group. Frank joined DBI in 2006 where he was responsible for sourcing and structuring investment transactions, including co-investments into two HCAP Partners portfolio companies. |
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Hope Mago – Partner More Info
Hope joined HCAP Partners in May 2009. Hope participates in the origination and analysis of new investment opportunities, investment due diligence, deal underwriting, and investment monitoring. In addition, he has led the development of impact investing initiatives since joining the firm and contributes to thought leadership in the impact investing space. Hope is currently a board observer or actively involved in Arosa, CortiCare, TCS Healthcare Technologies, and Sleep Data. Prior to joining HCAP Partners, Hope worked as an Analyst at the Reserve Bank of Zimbabwe where he was involved in economic policy formulation, lending due diligence for export ventures receiving funding through the Export Support Facility under the Exchange Control Division. |
Financial Performance
Impact Performance
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Percentage of Total Assets Under
Management that are Impact Investments: |
75% – 99%
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During the due diligence process, HCAP Partners works with portfolio company management to assess current job quality standards through the lens of HCAP's Gainful Jobs Approach. They then collaborate on a roadmap to improve job quality standards which is tracked and measured and reported to our Limited Partners.
Impact Tracking and Monitoring
Learn More
4250 Executive Square, Suite 500, La Jolla, CA 92037 USA
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