Case Studies

Fund Case Study

Stonehenge Capital Case Study


Stonehenge Capital is a nationally-focused investment company, managing funds of various types in geographies across the US. Established in 1999, Stonehenge makes high impact investments in areas targeted for economic revitalization, primarily using federal and state tax incentive programs.


To date, the firm has managed more than $1.1B in federal and state New Markets Tax Credit allocations, including several loan funds with place-based strategies designed to address the capital needs of small businesses in underserved communities. Stonehenge also manages one Small Business Investment Company (SBIC) fund, called Stonehenge Community Impact Fund LP.

This SBIC fund builds on Stonehenge’s existing experience deploying capital to businesses within economically distressed or disadvantaged communities. The criteria for the Stonehenge Community Impact Fund is similar in many regards to the firm’s other investment funds: targeting lower-income census tracts, HUB Zones, and minority entrepreneurs.

The fund holds roughly $225M in total assets, and, thanks to the unique and highly valuable incentive structure provided by the SBA, the Stonehenge team only had to raise roughly $75M in private capital for the fund, which was then matched 2:1 by federal government debentures. 

The lion’s share of the Stonehenge SBIC fund’s Limited Partner (LP) investors are banks and financial institutions — for whom an investment in this fund both satisfies their institution’s motivation to generate profits, and also in many cases allows the banks to count this investment toward their total Community Reinvestment Act (CRA) obligations.

Investment in the Stonehenge Community Impact Fund works much like any other private investment fund. For instance, the fund adheres to the following, traditional criteria: 

  • 7- to 10-year hold period of private capital before returns to investors.
  • Standard fund-level “economics” including a 2% management fee charged by the General Partnership, and a non-disclosed but traditional “waterfall” structure for distributing carried interest.

Investment Strategy

  • Typical check size: $5M – $15M
  • Terms: Senior secured, senior-stretch, and unitranche debt — often including equity kickers or warrants
  • Target firm size: Revenue of $5M – $75M and EBITDA of $1M – $10M
  • Business use(s) of funds: General growth capital, equipment purchases, facility acquisitions or expansions, management buyouts, company acquisitions, generational transfers. Various uses of funds that banks typically are less likely to approve for secured debt.
  • Specific Focus on Low-to-Moderate Income (LMI) Communities: Qualified locations may include but are not limited to Opportunity Zones, NMTC-eligible census tracts, rural communities, and other locations targeted for economic development.
  • Cost of Capital: High single-digit APRs for entrepreneurs (8-10%)

Track Record 

As of July 2022, Stonehenge SBIC has deployed $45M of its $225M in capital into four deals.

Case Study: PosiGen Solar — Portfolio Company

PosiGen is a residential solar contractor focused on low-to-moderate-income communities, based in New Orleans, Louisiana. The company also provides energy-efficient solutions to homeowners. Not only was PosiGen based in the appropriate geographic location for the Stonehenge SBIC fund to invest, but the business also creates a positive social and environmental impact in the community, making the deal attractive from an impact standpoint.

PosiGen needed a total of $24M for working capital to grow the business, plus debt-refinance funding to decrease monthly debt expense and improve margins. The Stonehenge SBIC fund provided $8M in a senior working capital facility and specifically took a risk by refinancing the company’s debt for a work in progress, which allowed the company to grow more quickly without having to wait for project completion to refinance.