The biggest Hispanic-controlled investment partnership in the United States has agreed to support the first Hispanic-owned business bank to open in Los Angeles in 30 years, the investment house announced today at the New America Alliance (NAA) gathering in New York.
Palladium Equity Partners LLC announced it has signed a definitive agreement to invest in Promerica Bank, formed to serve Los Angeles as "a business-oriented commercial bank with an expertise in the Latino business."
The new bank's chairwoman, Maria Contreras-Sweet, discussed the advanatges of thepartnership Thursday at NAA's Wall Street Summit. "It provides, first and foremost, as we build our valuation model, if we ever need capital on a short-term basis for an acquisition or something else, that we have the power and strength of Palladium.
"Second we really like it because they're Latino managed, since we're all in same area of interest. And third, what we liked about this fund is that it is patient. To them this did not mean two years, it meant fivem six, seven years, because this is a long-term commitment to the Latino community.
In a release, Palladium trumpeted Promerica as "a concrete example of American Latino economic empowerment, which is at the center of the NAA advocacy initiatives." Palladium founder and managing partner Marcos A. Rodriguez will receive the 2006 NAA Business Achievement Award later today.
In that release, Palladium did not specify how much money its Palladium Fund III expected to invest in the bank. Earlier this month Promerica announced it had surpassed its initial funding goal of $20 million to $25 million.
"It's taken 30 years to form a bank that addresses the business ventures of L.A.'s largest and hugely underserved community, and only 60 days for Latino shareholders to take a vital role in making it happen," said Ms. Contreras-Sweet, at the time. The bank said the closing date for that offering had been extended one month "to accommodate the overwhelming interest in the venture and allow as many families and individuals as possible to become involved."
On Thursday, Ms. Contreras-Sweet – California's former secretary of Business, Transportation and Housing – called Palladium's investment "a tremendous addition to our business. They will provide us with more than just capital, as the partnership will also generate synergies with the potential of offering both private equity capital and conventional loans to mutual clients."
Promerica expects to open its doors in November.
"While we are proud of the milestone we have achieved, we expect even greater accomplishments as the bank engages small businesses, be they Latino, Asian, non-ethnic or women-owned, in a concerted effort to expand the economic landscape of the region," Ms. Contreras-Sweet said in a statement Thursday.
This is the second investment of Palladium Fund III, which closed in March 2006 with $520 million of committed capital. Palladium Equity Partners has a particular focus on companies capitalizing on the U.S. Hispanic market. Formed in 1997, Palladium currently has committed equity capital in excess of $750 million.
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