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CHICAGO-Wrightwood Capital has acquired the investment fund management team of Hanover Financial Co. The sale includes the transfer of capital commitments from investors of the Hanover Real Estate Partners Fund III into the Wrightwood Capital High Yield Partners II, including affiliates of an insurance company and a private pension plan, the company said. The integration of the groups came as the result of a longstanding relationship of a few of the two company’s members.

“Wrightwood Capital is a growth-oriented real estate investment firm and we really put a great deal of emphasis on enhancing the mezzanine and equity investment strategies of the firm,” says David Friedman, managing director, fund management with Wrightwood. “We’ve taken an open mind to a combined organic as well as buying approach to growth. Hanover and Wrightwood had a longstanding relationship, and it seemed to make a large amount of sense for them to join a larger platform that would help them further accelerate their growth.”

Michael Lowinger and Mark Macedo, principals of Hanover who founded the company in 1999, knew Friedman and other members of Wrightwood since the 1980s, when they worked together at Heller Financial. The company, once based out of Chicago, was acquired in 2001 by General Electric. Wrightwood Capital was formally formed in 2004, but has been in business since the early-1990s as predecessor company Cohen Financial.

“The immediate strategy is the growth of our mezzanine and high-yield business funds,” Friedman says. “Going forward, Wrightwood is poised to build other strategies into itself, be it private- or public-oriented investment strategies. Hanover has been a brand, and built a tremendous business on the West Coast, and Mike and Mark’s addition will help to build the national platform for Wrightwood.”

Lowinger and Macedo will continue to work from the West, based out of Los Angeles. Wrightwood also has offices in Orange County and San Francisco, Friedman says. “This was a very opportune time,” Friedman says. “The Wrightwood fund was substantially raised, and Michael and Mark felt good that there was an abundance of capital to be invested and committed for institutional investors. One of the reasons they picked this path had to do with the success Wrightwood had in the fundraising.”

Friedman declined to disclose the amount Wrightwood paid for Hanover’s team. “Michael and Mark are incredibly astute investors and have a long-standing track record of investing in the mezzanine and equity space,” Friedman says. “They broaden Wrightwood’s western presence, which is long term a very important growth market. They’re senior members of the team, which should avail them the opportunity to play an important role in smart growth of the enterprise.”

Friedman says the unique economic climate also presents new opportunities for growth for Wrightwood. “Wrightwood continues to focus on building out its core businesses, some of which are the structured senior debt business, the mezzanine and equity business and the net lease industrial business,” Friedman says. “We think the disruption in the credit and capital markets will provide us additional opportunities to grow and expand the platform, and we’re looking forward to the firm continuing to build in other areas as the market provides us opportunities.”

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