innovate arkansas

The Arkansas Development Finance Authority said Tuesday that its Arkansas Institutional Fund will invest $4.5 million in Petra Growth Fund II, managed by Petra Capital Partners of Nashville, Tenn.

Petra Capital Partners will seek investment opportunities in growing Arkansas companies in the health care business and information services sectors, ADFA said in a news release.

"Our team worked closely with Petra Capital Partners to make sure Petra and the Arkansas Institutional Fund receive full benefit of the SBA leverage available to their fund," ADFA VP Gene Eagle said. "By utilizing the SBA's venture capital program Petra will be able to more than double the available capital they have to invest."

Petra Capital Partners targets provider services, information technology and outsourcing companies that lower costs and improve the quality of outcomes for the health care industry. The company also invests in business process outsourcing companies that use technology and skilled labor to lower costs and improve efficiency.

Arkansas companies in the health care business and information services sectors can contact Petra for more information.

The Petra Growth Fund II totals $160 million.

"We look forward to working with Arkansas entrepreneurs," Mike Blackburn, Petra managing partner, said. "We believe there are companies here with whom we can partner to accelerate their growth. We will be looking hard to find them and to help them realize their full potential."

In addition to Petra Capital Partners, ADFA, through its Arkansas Institutional Fund, has entered into similar agreements with six others including Noro-Moseley Partners, MB Venture Partners, Prolog Ventures, Meritus Ventures, SSM Partners and the Fund for Arkansas's Future.

Eagle said those partnerships have resulted in an investment of $5 million in Arkansas companies.

"Nine companies have received capital," he said.

In 2001, lawmakers modified bond guaranty legislation to allow ADFA to use credit enhancement and state tax credits to finance "fund of funds" venture capital investments. The move created the $70 million Arkansas Institutional Fund.

The Arkansas Institutional Fund aims strengthen the venture capital network in Arkansas and promote economic growth. It is authorized to invest in professionally managed venture capital funds that make risk capital more accessible to promising Arkansas firms.

Eagle said the Arkansas Institutional Fund has closed on investments totaling $24.1 million and has made commitments for another $6 million.

Cimarron Capital Partners, a national investment management firm specializing in regional private equity, is the fund manager for the Arkansas Institutional Fund.

Bank of America is the lender for the fund.