GRAND RAPIDS - For the first time, Grand Rapids has a viable private equity fund that is actively looking for investment opportunities. That is what Bridge Street Capital Partners LLC Managing Partner John J. Meilner told the Fourth Friday Technology Forum meeting May 28 at Sagestone Inc.

"The genesis of the fund goes back to Right Place Inc. and Birgit Klohs," Meilner said. "A study concluded that there was no formal source of private equity capital available so we decided to do it the old fashioned way - we just did it ourselves."

It took about 15-18 months to create the fund that would become Bridge Street Capital Partners and another 6-9 months to select the funds’ managing partners, Meilner and William F. Kaczynski Jr.

Meilner said he and Kaczynski began talking to potential investors last fall and now have $30 million committed to the fund. He expects to begin raising the second round of capital for the fund this fall.

But as of now, "We are officially in business," he said. "Over the next couple of months we will focus on new investment opportunities. We will be opportunistic in making controlling investments."

Meilner said Bridge Street would invest $2.5 million - $7.5 million in each of 8-12 portfolio companies. The geographic focus will be on the Great Lakes region.

Bridge Street will not be making venture capital or angel investments. "VC and angels want to hit maybe one home run that is a huge payoff. We are looking to hit a lot of singles and doubles." And Meilner said the fund would not be looking at distressed or turnaround situations. That presents another difference from VC or angel investing.

"Burn rate is not a good buzz phrase for us," said Meilner. "We don’t want to be funding losses."

He sees a real opportunity in buyout or growth investments in middle market companies in the $15 million - $20 million range that are in the process of transitioning family ownership to the next generation or to the business’ management staff.

"Some of the current owners of family businesses are just tired and are ready to let the next guy do it," he said. "And the rest of the private equity world doesn’t come down to this space very often."

Bridge Street will enter those investments with the goal - or exit strategy - of growing its portfolio companies to $50 million and above, and then selling them to another private equity firm that handles businesses in that range.