CVF Capital Partners Opens New San Diego Office

CVF Capital Partners announces the opening of a San Diego office in the downtown business district

Davis, CA and San Diego, CA – March 6, 2017

CVF Capital Partners (“CVF”) announces the opening of a San Diego office in the downtown business district. This new Southern California office, allows CVF to broaden its California presence and be closer to Southland middle-market companies.

José Blanco, CVF Managing Partner, commented, “We have done business for years all over California and the Central Valley, but having a local San Diego office will allow us to broaden our reach and be closer to business owners, advisors, bank partners, and many of our LP’s in Southern California”.

CVF’s launch of its third fund, CVF III, is looking to capture the positive economic and business dynamics of anticipated lower taxes, less regulatory burden, and a good macroeconomic outlook. As the group has done over the last decade, it will invest mezzanine capital through subordinated debt and equity instruments in lower-middle and middle-market companies throughout California, the Pacific Northwest, and the broader U.S. Southwest. “We continue to increase our efforts in expanding our geographic footprint and will continue to seek the best partners. To date, we have done transactions in California, Washington, Oregon, and Texas. Opening a new office will allow CVF to expand and better cover markets throughout the West”, Ed McNulty, CVF Managing Partner commented.

As part of this new expansion, CVF has brought Mr. Stefan Okhuysen back on board. Mr. Okhuysen previously worked for the firm and now returns as a Principal to head the new office. Brad Triebsch, CVF Managing Partner, commented, “We are very happy to have Stefan back. Having him leading our efforts in Southern California and into new markets will help our firm’s growth and continued success. In addition, his experience in Hispanic markets and companies will greatly aid businesses pursuing cross border opportunities”.

With the launch of CVF III, the California-based firm intends to invest between $5 and $20 million dollars per transaction in Mezzanine debt and/or equity. CVF will continue to focus mainly on financing acquisitions, management buyouts, recapitalizations, expansions, and strategic opportunities with a generalist industry approach.

For more information contact:

José Blanco

Managing Partner

CVF Capital Partners, Inc.

1590 Drew Avenue, Suite 110

Davis, CA 95618

Tel: 530-757-7004 ext. 227

Email: jblanco@cvfcapitalpartners.com

Stefan Okhuysen

Principal

CVF Capital Partners, Inc.

501 Broadway, Suite 800

San Diego, CA

Tel: 619-400-4881

Email: sokhuysen@cvfcapitalpartners.com

U.S. and California Economies Post Solid 2016

2017 outlook has concerns and opportunities

The S&P 500 was up over 11 percent in 2016, however, the year was highlighted by a high degree of uncertainty. The stock market correction in January, the Brexit surprise, and Donald Trump’s unexpected victory are just some of the events that have left small businesses feeling increasingly uncertain.

The table below highlights the evolution of the U.S. and California economies over the last several years. The U.S. has seen consistently falling unemployment with average GDP growth of 2.0% to 2.2% but has depended on strong personal consumption and moderate levels of corporate investment to drive the economy due to trade deficits and tepid government spending.

California’s GDP has grown just above the U.S. trend range the last few years, largely driven by technology and the leisure and hospitality sectors not to mention the construction, energy, and ag sectors. The table also highlights the sectors that remain laggards (in yellow) which include manufacturing, transportation, and business services.

We remain cautiously optimistic about 2017, although it’s far from clear as to how President-elect Donald Trump will impact domestic and global events during his upcoming administration and what Europe’s populist push means for the global economy. However, if U.S. GDP growth does indeed expand faster than it has, that’s good news for small businesses.

If the new president decides to follow through on his hard-line trade agenda, a great deal of further uncertainty will be injected into the business plans of small businesses. CVF anticipates mitigating the impact of these market risks in its portfolio by waiting out the volatility and taking advantage of improved valuations to invest in firms with superior long-term prospects.

Due to unstable economic conditions in many areas outside the U.S., a rising dollar, and the fact that U.S. small businesses stand to gain the most from a lower tax rate, small businesses will be a sweet spot for investors in the near term.

We hope President-elect Trump’s promise of growing the pie rather than just redistributing it becomes a reality, but one should not forget that the President-elect is an “apprentice” president. His first 100 days could see some errors, which could result in a recalibration of expectations.

The President-elect’s proposals for corporate tax reform, less regulation, and fiscal stimulus should be broadly beneficial to the economy and corporate earnings. Repatriation of overseas cash has the potential to unlock additional cash that can be directed toward dividend payouts by large public companies providing more investable capital to the broader U.S. economy.

The leading causes of risk heading into the new year are the changes wrought by the recent U.S. presidential election, Brexit, and uncertainty regarding the path of interest-rate hikes by the Federal Reserve. These are several among a collection of factors with the potential to produce short-term volatility and longer-term impacts on sector and company fundamentals.

The U.S. remains a tale of two economies – strong consumer spending partly offset by weak industrial activity that may result in modest but accelerating economic growth. Valuations in many areas of American small businesses seem stretched, but it may not remain so expensive if there is a pickup in revenue and EBITDA from potential fiscal stimulus policies.

5th Annual California Food and Ag Summit

November, 10th, Wine & Roses, Lodi

PwC, Central Valley Fund, and Rabobank are hosting the fifth annual California Food & Ag Summit on Thursday, November 10. This conference is an exclusive (invitation-only) forum for executives and senior management of companies in the food and agricultural sectors including growers, processors, distributors, and suppliers across California. The summit includes:

Keynote speakers:

• Steve Westly

  • Co-founder of eBay, Inc.

  • State Controller and Chief Financial Officer of California from 2003 to 2007

  • Candidate for the Governor of California in the 2018 election

• Dean Cortopassi

  • Successful Ag Business CEO

  • Founder and Co-Owner of Stanislaus Food Products Co. Inc.

  • Former CEO of San Tomo Group

• Industry Panels

  • Ag Technology – Panel – From research to big business

  • Financing Alternatives – Panel – Making the most of your access to capital

  • Consumer Trends & Retail – Panel – How to resonate with the consumer

• Networking Opportunities

  • Opportunities to network and learn from industry area contacts

  • Opening lunch and appetizer & wine reception

This is a unique opportunity to participate in the discussion of key issues facing the food and agriculture industries – from growing to production, processing, distribution, and retail, all centered on what’s taking place in our local region.

Additional information can be found online: 5th Annual California Food & Ag Summit.