CLEVELAND, Aug. 12 /PRNewswire/ -- A newly formed investment group is looking throughout Ohio for minority businesses with high potential and a strong desire to grow. The MWV Pinnacle Capital Fund recently began operations after 24 corporations and individuals pledged a total of $21 million to provide debt, mezzanine and equity portfolio investments in promising businesses that are owned, controlled or managed by minorities. Additional investors are expected to be added later this year to enable the fund to reach its goal of $25 million. "Our primary objective is to help established minority businesses grow to a size and scale where they can not only be competitive and have a positive impact on their communities but also nurture additional minority businesses," said Eric Von Hendrix, fund manager. "We will also selectively consider leveraged buyout transactions that will provide opportunities for minority management." Each investment by the fund is likely to be between $750,000 and $3 million, said Von Hendrix, who added that he is currently reviewing several potential opportunities. The champion of the fund has been A. Malachi Mixon III, chairman and chief executive officer of Invacare Corporation, who was the first committed investor. Other driving forces behind the fund are Cleveland Tomorrow, the Cleveland Commission on Economic Partnerships and Inclusion and the President's Council. The fund was established after research by the Commission's Investment and Growth Task Force, staffed by Cleveland Tomorrow, confirmed that the lack of equity capital is a key barrier to growth for high- potential, minority-owned companies. The task force is co-chaired by Henry L. Meyer III, president and chief executive officer of KeyCorp, and Carole F. Hoover, president and chief executive officer of HooverMilstein. "There is no shortage of minority businesses in Ohio with the desire and ability to grow," said former U.S. Rep. Louis Stokes, co-chair of the Commission, a program of the Greater Cleveland Roundtable in partnership with Cleveland Tomorrow, Greater Cleveland Growth Association, Urban League of Greater Cleveland and Cleveland Initiative for Education. "What they have faced, however, has been a shortage of equity capital sources. This new fund offers tremendous promise for the future." Earlier this year, Black Enterprise magazine listed only seven Ohio-based firms on its Industrial/Service 100, which includes the nation's leading African-American-owned businesses. The largest of those is Anderson-Dubose Co. of Solon, which had sales of $197 million last year. Four Ohio companies are on the current Hispanic Business 500, led by CSA Group of Cincinnati with $47 million in sales. "By focusing equity capital on promising minority businesses, we expect to help fill an obvious void in the marketplace," said David A. Daberko, chairman of Cleveland Tomorrow and chairman and chief executive officer of National City Corporation. "We foresee enabling several companies to move solidly above the $50 million sales threshold over the next five to seven years." Cleveland Tomorrow is a group of more than 50 chief executive officers from the largest corporations in Northeast Ohio. The top 10 investors in the fund are Charter One Bank, The Cleveland Foundation, Eaton Corporation, Fifth Third Community Development Corporation, FirstEnergy Corporation, Huntington Community Development Corporation, KeyCorp, National City Community Development Corporation, The Sherwin Williams Company and Mixon. Other investors include First Merit Community Development Corporation; Forest City Enterprises, Inc.; Jo-Ann Stores, Inc.; Lubrizol Corporation; Ohio Savings Bank; ShoreBank Corporation; and US Bancorp Community Development Corporation. "By stepping forward, the investors in this new fund have demonstrated their strong dedication to the success of an important segment of our state's economy," said Brian E. Hall, chairperson of the President's Council, a coalition of chief executive officers from some of Greater Cleveland's largest African-American-owned-and-operated businesses and an investor in the fund. "We are very pleased at the level of investment from Northeast Ohio corporations, reflecting their strong belief in the economic viability of minority businesses." Created in December 2000, the Cleveland Commission on Economic Partnerships and Inclusion is a broad-based group of employers and community leaders who have joined forces to develop and implement a locally based set of interrelated initiatives to address the economic challenges impacting Greater Cleveland's minority communities. Its mission is to significantly improve the level of inclusion - the meaningful involvement of minority businesses and individuals - in the economic engine that drives Greater Cleveland. "The MWV Pinnacle Capital Fund is tangible evidence of a sincere commitment to providing greater opportunities for all segments of the economy," said Commission Co-Chair Alexander M. Cutler, chairman and chief executive officer of Eaton Corporation. "We look forward to celebrating the future success of increasing numbers of our state's minority businesses." More information about the fund is available by calling 216-292-0100.
SOURCE MWV Pinnacle Capital Fund