General
Since the early 1990s, ACMC and its affiliates, which operate under the names Advantage
Capital and Advantage Capital Partners (ACMC and its affiliates are collectively referred to herein
as “Advantage Capital” or “AC”), have utilized public-private partnerships with state and federal
economic development organizations to bring investment capital to communities that are
underserved by traditional capital providers. Using tax credits offered under the federal and state
New Markets Tax Credit Programs (the “NMTC Programs”) and other state sponsored investment
programs (“State Programs”), AC has partnered with some of the nation’s leading insurance
companies and commercial banks to create proprietary accounts that target investments to these
areas. To date, AC has invested approximately $4.1 billion in small to mid-sized businesses
through its proprietary accounts. See Item 10 “Other Financial Industry Activities and
Affiliations” for more information with respect to these activities.
AC’s investment advisory business is conducted through ACMC and four relying advisers:
Advantage Capital Agribusiness GP, L.L.C. (“Agribusiness GP”), Advantage Capital
Agribusiness Manager, L.L.C. (“Agribusiness Manager”), Advantage Capital ETCF GP, LLC
(“ETCF GP”) and ETCF Management LLC (“ETCF Manager”), collectively referred to as the
“Relying Advisers.” References to ACMC throughout this Brochure refer to ACMC and its
Relying Advisers, unless the context otherwise requires.
ACMC, together with its Relying Advisers, conducts a single advisory business subject to
a unified compliance program. As of December 31, 2023, ACMC provided investment advisory
services to ten private funds. Advantage Capital Agribusiness Partners, L.P., a Delaware limited
partnership that closed on October 3, 2014 (the “Agribusiness Fund”), Empower the Change Fund,
LP, a Delaware limited partnership that had its first closing on March 22, 2022 (“ETCF”) and eight
funds that are collectively referred to as the “Solar Funds” (name and closing date set forth below).
• Advantage Capital Solar Partners I, L.L.C. (“Solar Fund I”) - October 11, 2017
• Advantage Capital Solar Partners II, L.L.C. (“Solar Fund II”) – October 26, 2018
• Advantage Capital Solar Partners III, L.L.C. (“Solar Fund III”) – October 22, 2019
• Advantage Capital Solar Partners IV, L.L.C. (“Solar Fund IV”) – May 12, 2021
• Advantage Capital Solar Partners V, L.L.C. (“Solar Fund V”) – October 19, 2021
• Advantage Capital Solar Partners VI, L.L.C. (“Solar Fund VI”) - September 13, 2022
• Advantage Capital Solar Partners VII, L.L.C. (“Solar Fund VII”) - September 13, 2022
• Advantage Capital Solar Partners VIII, L.L.C. (“Solar Fund VIII”) – April 18, 2023
The Solar Funds are all Delaware limited liability companies. The Agribusiness Fund,
ETCF and Solar Funds are private equity funds that qualify for exclusion from the definition of an
investment company under Section 3(c)(1) of the Investment Company Act of 1940. They are
collectively referred to throughout this brochure as the “Client Funds.”
Where applicable, the Client Funds referenced throughout the brochure could also include
any other entities to whom ACMC may provide investment advisory services in the future. Any
such entities will become a part of ACMC’s existing advisory business and subject to the same
unified compliance program. ACMC will update its Form ADV as necessary should it begin
providing investment advisory services to a new Client Fund.
The Agribusiness Fund
The Agribusiness Fund is structured to comply with the statutes and regulations of the
Rural Business Investment Company (“RBIC”) Program, a venture capital program administered
by the U.S. Department of Agriculture for the purpose of promoting economic development in
rural areas and the creation of wealth and job opportunities for individuals living in such areas.
Pursuant to the RBIC Program, Farm Credit System institutions, such as farm credit banks (“FCS
Institutions”), are permitted to purchase equity interests in an RBIC such as the Agribusiness Fund.
On July 11, 2014, the Agribusiness Fund was licensed by the Department of Agriculture
as an RBIC and closed on October 3, 2014, with capital commitments from nine FCS Institutions
($150 million) and Agribusiness GP ($4.5 million). The Agribusiness Fund was designed to create
a diversified portfolio of investments in businesses that are agriculture related and/or located in
rural America, with a view to improving rural economic prosperity, producing long-term returns
for investors and bringing awareness of rural investing to a broader investor base. As an RBIC,
Agribusiness Fund investments are subject to substantial restrictions, such as size and location of
investment, industry sector, and use of investment proceeds. See Item 8. “Methods of Analysis,
Investment Strategies and Risk of Loss—The Agribusiness Fund.”
The investment period for the Agribusiness Fund ended on October 3, 2019. As such,
ACMC is no longer sourcing new investments for the Agribusiness Fund and may only use the
remaining uncalled capital to pay expenses of the Agribusiness Fund, including management fees,
and to make follow-on investments in existing portfolio companies.
The Solar Funds
Solar Fund I closed with two insurance company investors that made capital commitments
totaling $35 million (“Solar I Class A Members”). Solar Fund II closed with two insurance
company investors that agreed to make capital commitments totaling $32.5 million (“Solar II Class
A Members”). Solar Fund III closed with five investors that agreed to make capital commitments
totaling $60.3 million. Three insurance companies and one banking institution (“Solar III Class A
Members”) collectively committed $54.3 million, and Advantage Capital Solar Tax Equity
Investor, LLC, an ACMC-affiliated investor (“Solar III Class C Member”) committed $6 million.
Solar Fund IV closed with three insurance company investors that made capital commitments
totaling $64.5 million (“Solar IV Class A Members”). Solar Fund V closed with one bank that
made a $30.68 million capital commitment ("Solar V Class A Member”). Solar Fund VI, Solar
Fund VII and Solar Fund VIII closed with a single insurance company (“Solar VI Class A
Member”) that initially agreed to make capital commitments totaling $55 million for Solar Fund
VI, $250 million for Solar Fund VII and $375 million for Solar VIII. The Class B Members for
the Solar Funds are all listed below. These Class B Members are all affiliates of ACMC and have
committed only a nominal capital amount. All Members other than the Class B Members may
also be referred to herein as the “Tax Members.”
• Advantage Capital Solar Holdings, LLC for Solar Fund I and Solar Fund II (“Solar
Class B Member”);
• Advantage Capital Solar Holdings III, LLC for Solar Fund III (“Solar III Class B
Member”);
• Advantage Capital Solar Holdings IV, LLC for Solar Fund IV and Solar Fund V
(“Solar IV Class B Member”);
• Advantage Capital Solar Holdings 2022, LLC for Solar Fund VI and Solar Fund
VII (“Solar VI Class B Member”); and
• Advantage Capital Solar Holdings 2023, LLC for Solar Fund VIII (“Solar VIII
Class B Member”).
The Solar Funds focus on equity investments in flow-through entities owning solar energy
production facility developments that are expected to generate Federal Investment Tax Credits
pursuant to Internal Revenue Code Section 48, other tax benefits and cash flows that may be
allocated to each fund’s Tax Members. The Solar Funds are designed to generate tax credits for
their Tax Members that may be utilized in the year the funds’ underlying projects are placed into
service, which is generally the same year or the year immediately following investment into the
funds. Thus, the Solar Funds have an extremely short investment period.
ETCF
ETCF is a private equity fund that Advantage Capital formed in partnership with the
National Minority Supplier Development Council Business Consortium Fund (“BCF”) to invest
in Minority Business Enterprises (MBEs). ETCF’s initial closing was on March 22, 2022 and
included nine institutional investors that agreed to commit up to $35.1 million and ETCF GP which
agreed to commit 3% of capital committed up to $6 million. ETCF’s second closing on October
28, 2022 included three institutional investors that agreed to make capital commitments totaling
$15.5 million, and the third closing on March 31, 2023 included one institutional investor that
agreed to commit $7.5 million. ETCF has several additional institutional investors that are in the
final stages of evaluating commitments to ETCF (up to $10 million in the aggregate) that would
entail a final closing for the fund in the next month or so. As of December 31, 2023, ETCF had
called $17.24 million of capital and invested in three companies.
Principal Owners
ACMC is 100% owned by the Advantage Capital Employee Stock Ownership Plan and
Trust (the “ESOP”). No person or entity beneficially owns 25% or more of the ESOP. However,
Steven T. Stull, AC’s Chief Executive Officer, has the right to vote the number of shares of ACMC
common stock necessary to elect up to 50% of the directors of ACMC. Such voting rights were
granted to Mr. Stull as a secured creditor of the ESOP and terminate upon the earlier to occur of
repayment of the debt owed to Mr. Stull by the ESOP or December 24, 2024.
Agribusiness GP, the general partner of the Agribusiness Fund, has delegated management
responsibility for such Fund to Agribusiness Manager, which is 100% owned by ACMC.
Agribusiness GP is beneficially owned by ACMC (less than 10%) and principals, employees and
consultants of ACMC. Only Mr. Stull owns more than 25% of Agribusiness GP.
The Solar Funds have delegated all management responsibility to ACMC. The Solar Class
B Member, Solar III Class B Member, Solar IV Class B Member, Solar VI Class B Member and
Solar VIII Class B Member are beneficially owned by Mr. Stull and other members of AC
management, with only Mr. Stull owning more than 20% of the equity of each member.
Additionally, the Solar III Class C Member is 100% owned by former AC employee Carl
Weatherley-White.
Advantage Capital ETCF GP, the general partner of ETCF, has delegated management
responsibility for such Fund to ETCF Manager, which is 100% owned by ACMC. Advantage
Capital ETCF Owners Fund, LLC (“ETCF Owners Fund”), Advantage Capital ETCF Investors
Fund, LLC (“ETCF Investors Fund”) and BCF are all members of ETCF GP. ETCF Owners Fund
and ETCF Investors Fund own 50.1% and 49.9% of ETCF GP, respectively; however, with respect
to the carried interest in ETCF that the ETCF is entitled to (See Item 6. “Performance-Based Fees
and Side-by-Side Management), ETCF Owners Fund and ETCF Investors Fund are entitled to
receive a total of 90% of the profits interest (40.1% and 49.9%, respectively) from ETCF GP,
while BCF is entitled to receive the remaining 10%. BCF has not committed any capital to ETCF
and therefore only has a carried interest in the fund’s returns. BCF and ACMC are separate entities
with no common ownership.
Mr. Stull founded the group of entities known as Advantage Capital Partners in 1992 and
has served as CEO since that time. He directs the firm’s investment policy, fundraising and
strategic planning and has over 30 years of experience in all stages of the investment life-cycle,
from identifying investment opportunities to structuring investment exits.
Investment Advisory Activity
Investment advice to each Client Fund is provided on a discretionary basis and is tailored
to the investment criteria and needs of each such Client Fund. Each Client Fund is subject to strict
investment parameters, including in the case of the Agribusiness Fund, federal law mandates
regarding the types and sizes of investments and the kind and character of businesses into which
investments may be made, in the case of the Solar Funds, investments that are expected to generate
Federal Investment Tax Credits under Section 48 of the Internal Revenue Code and in the case of
ETCF, investments into MBEs.
AC’s investment advisory services are principally conducted through its offices located in
Louisiana, Missouri, Nevada, New York and Texas. AC’s additional physical offices are in
California, Connecticut, New Hampshire and Mississippi. The majority of the operations of the
Agribusiness Fund, Solar Funds and ETCF are conducted in the Texas, Missouri, New Orleans
and New York offices. All of AC’s accounting, compliance and fund administration is conducted
at, and substantially all of its books and records are located in, its offices in New Orleans,
Louisiana.
At closing of the Agribusiness Fund on October 3, 2014, $154.5 million of capital was
committed to the Agribusiness Fund. As of December 31, 2023, approximately $152.5 million of
the commitments had been called and paid into the Agribusiness Fund. The Agribusiness Fund
has access to approximately $2.0 million in uncalled capital; however, since the fund’s investment
period has expired, capital may only be called for expenses, including management fees, and
follow-on investments in existing portfolio companies. Assets of the Agribusiness Fund totaled
approximately $ 96.86 million as of December 31, 2023.
The Solar I Class A Members committed a total of $35 million of capital to Solar Fund I,
all of which had been called and paid. Solar Fund I had assets valued at $2.35 million as of
December 31, 20223. The Solar II Class A Members agreed to commit a total of $32.5 million of
capital. Approximately $26 million of their commitments were called and paid into Solar Fund II.
The $6.5 million of remaining unfunded capital commitments for Solar Fund II will not be called.
Solar Fund II had assets totaling $3.03 million as of December 31, 2023. When Solar Fund III
closed on October 22, 2019, the Solar III Class A Members and Solar III Class C Member
collectively committed a total of $60.3 million of capital. As of December 31, 2023, $60.15
million of the capital had been called and paid. The small amount of remaining unfunded
commitments for Solar Fund III will not be called. Solar Fund III had assets totaling $20.20
million as of December 31, 2023. The Solar IV Class A Members committed a total of $64.5
million to Solar Fund IV. As of December 31, 2023, all of the capital had been called and paid.
Solar Fund IV had assets totaling $20.47 million as of December 31, 2023. The Solar V Class A
Member committed a total of $30.68 million of capital. As of December 31, 2023, $17.49 million
of the capital had been called and paid. Solar V will continue to call capital during 2024. Solar
Fund V had assets totaling $16.04 million as of December 31, 2023.
Per the operating agreements for Solar Fund VI, Solar Fund VII and Solar Fund VIII, the
amount that the Solar VI Class A Member will commit depends on the capital needed to fund the
project investments and will be finalized after those investments are selected. The Solar VI Class
A Member initially agreed to commit $55 million to Solar Fund VI for project investments but
ended up committing a total of $102.36 million. As of December 31, 2023, $99.22 million of the
capital was called and paid for Solar Fund VI. The remaining capital was called at the beginning
of 2024. Solar Fund VI had assets totaling $31.17 million as of December 31, 2023. The Solar
VI Class A Member initially agreed to commit $250 million of capital to Solar Fund VII for project
investments but has already agreed to contribute more based upon the anticipated amount needed
to fund the project investments. As of December 31, 2023, $73.89 million of the capital was called
and paid for Solar Fund VII. Solar VII will continue to call capital during 2024. Solar Fund VII
had assets totaling $58.10 million as of December 31, 2023. The Solar VI Class A Member has
agreed to commit $325 million of capital to Solar Fund VIII for project investments. There was
no investment activity for Solar Fund VIII during 2023. Solar Fund VIII started calling capital at
the beginning of 2024 and has called nearly $58 million of capital to date.
As of December 31, 2023, ETCF’s limited partners agreed to commit up to $64.1 million.
At the initial closing on March 22, 2022, ETCF’s limited partners agreed to commit up to $40.1
million. This included nine institutional investors that agreed to make capital commitments up to
$35.1 million and ETCF GP which agreed to commit 3% of committed capital up to $6 million.
The second closing on October 28, 2022 included three institutional investors that agreed to make
capital commitments totaling $15.5 million, and the third closing on March 31, 2023 included one
institutional investor that agreed to commit $7.5 million. ETCF has several institutional investors
that are in the final stages of evaluating commitments up to $10 million in the aggregate to ETCF.
As of December 31, 2023, $17.24 million of the capital had been called and paid, and ETCF had
assets totaling $16.02 million.