Beyond pure debt instruments, Pinnacle Private Credit selectively provides structured equity, preferred equity, and minority co-investments alongside trusted private equity sponsors, independent sponsors, and family office syndicates. This capability enables us to serve as a comprehensive one-stop capital partner for complex buyouts and corporate carve-outs.
By pairing our senior or unitranche debt facility with a minority equity co-investment, sponsors can fully fund substantial transactions without scrambling to locate multiple secondary equity syndication partners.
Strategic Value of Preferred Equity
Preferred equity occupies a sophisticated tier in corporate finance: it sits senior to common equity holders, capturing contractual dividend yields and liquidation preference, while ranking subordinate to all debt tranches:
- Non-Debt Treatment: Because preferred equity is not debt, it does not inflate senior or total leverage ratios under commercial bank definitions.
- Contractual Coupon: Typically structured with a 10% to 14% dividend rate (payable in a blend of cash and PIK), offering steady returns.
- Minority Governance: We seek board observation rights and negative consent covenants on major asset sales, but leave day-to-day corporate governance in the hands of the lead sponsor.
- Downside Liquidation Preference: Guaranteed return of capital prior to any distribution to common equity holders.
Ideal Co-Investment Scenarios
- Platform Acquisitions with Rollover Founders: Supplying the necessary junior equity capital so the founding team can rollover meaningful equity without excessive dilution.
- Corporate Carve-Outs: Supporting the carve-out of a neglected division from a public corporation, funding initial standalone IT and administrative standup costs.
- Large Transformational Add-Ons: Injecting growth equity alongside existing sponsors when an unexpected, high-multiple acquisition opportunity emerges.
Submit Co-Investment Opportunity → Explore Combined Debt-Equity Facilities →