As interest in lower middle-market deals thrives, Capitala Group has closed a $125 million fund that focuses on investing in that space.

The fund, CapitalSouth SBIC Fund IV LP, received investments from existing and new investors, including public and private pensions, fund of funds and family offices. The fund will invest between $2 million and $10 million in business services, health care, consumer and retail, building products and manufacturing businesses. The firm's current investments include Tender Greens Holdings LLC, Merlin International Inc. and Sequoia Healthcare Management LLC.

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