Within that niche, one model that has commonly been reserved for big-fund companies with deep pockets is the “one-stop shop.” In that model, both borrower and investor needs are addressed. Fund mangers such as KKR and Blackstone are well-known examples, serving businesses with revenues in the billions. Of course, that would leave the majority of mid-market companies once again lacking.

Fortunately, over the past decade, visionary financial managers have taken that concept and adapted it to serve the needs of businesses with $200 million and less in revenue. For individual investors who fall outside of the high-net-worth parameter, these alternative investment firms offer clearly defined products while operating with a relationship-centric mindset that provides transparency to borrowers.

Some of these one-stop alternative investment firms provide investor products that range from debt and equity funds to innovative hybrid funds—all of which may require risk tolerance, but could generate significant and noteworthy returns. For the borrowers, collateral and returns are matched to investor funds, generating the type of transparency and confidence in the system that frees business owners to concentrate on growth and sustainability.

Mid-caps can also take heart in further customization offered by private equity partners. In many firms, the lending and investment divisions alike offer expertise in industry niches, such as healthcare and energy, so the solutions that are generated are not one-size-fits-all, but take into account an industry’s challenges and opportunities. For instance, alternative investment companies can offer solutions for equipment sale and leasebacks, subordinated debt, term and bridge loans, equity applications, reverse mergers, purchasing shares of ownership, etc. Plus, these companies often have deep, established relationships with other financing partners, which allows them to negotiate and structure deals that would be insurmountable for a mid-market business owner.

Moreover, using open-ended investment structures, private equity firms can address both debt and equity investment. Fund management firms marry the high returns from private equity investments to the more flexible terms of an open-end fund. After much shorter tie-up periods (one to four years versus five to 10 years for a closed-end fund), investors have the ability to liquidate their holdings by selling their interests back to the fund. This option is gaining strength in the investment community. For example, Ospraie Management in New York recently launched a $750 million hybrid fund that will make private equity investments with an open-end structure, and others are following suit, with investors responding very positively.

One Stop Today Opens the World to Tomorrow
Today’s options in business finance and investment have evolved from our nation’s original banking models that emphasized individual understanding and a hands-on approach. In a more complex and regulated environment, alternative investment firms are able to bridge the gap for mid-market companies that larger financial institutions cannot. By bringing a one-stop approach to both corporations and investors, these alternative investment firms are making their footprint in history. By ensuring that mid-caps are not obscured by their flashier brothers and sisters, and instead have access to the same kind of high-quality financial advising, structuring and investing, these firms position them to thrive in the global marketplace.