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Bay Capital Mezzanine Management
Bay Capital Mezzanine Management, led by John Erickson and Thomas Bozzuto, provides mezzanine debt and equity to lower-middle-market companies in the US.
Bay Capital Mezzanine Management
Bay Capital Mezzanine Management, founded in 2001 by John Erickson and Thomas Bozzuto, started as a mezzanine debt-focused firm backed by the Bozzuto family—a prominent real estate and construction dynasty in the Baltimore-Washington corridor. The firm initially operated as a single-family office for the Bozzuto family wealth generated through the Bozzuto Group's real estate development and management business. The firm invests primarily in senior secured and subordinated debt instruments, with equity co-investments, across sectors including business services, healthcare, technology, and infrastructure. It targets companies with $5-50 million in EBITDA, typically providing $5-20 million per transaction. Known portfolio companies include support services firms in the defense and government contracting space, and healthcare services companies. Geographically, the firm focuses on the Mid-Atlantic and Southeast United States, with selective deals in other regions. The firm maintains a small, lean team of five professionals as of late 2023, operating from its Baltimore headquarters and a Washington, D.C. office. Bay Capital has historically structured transactions as direct loans and co-investments alongside sponsor equity partners, rather than through commingled funds, giving it flexibility in deal structuring. The firm has also acted as a fund-of-funds investor in third-party mezzanine funds. What structurally distinguishes Bay Capital is its sustained focus on mezzanine debt in the lower-middle market—a niche where fewer dedicated lenders exist—combined with its family-office heritage allowing for patient capital deployment without external LP pressure. The firm can hold loans to maturity and exercise forbearance when needed, a structural advantage over BDC or CLO-based lenders.
General information
Firm type
Fund of Funds
Year founded
—
AUM
Undisclosed
Location
Region
North America
Country
United States
City
Baltimore
Corporate office
Baltimore, MD, United States
Additional offices
Washington, D.C. · United States
Principals
John C. Erickson
Managing Partner
Thomas S. Bozzuto
Managing Partner
Sector focus
Frequently asked questions
Who runs investment decisions at Bay Capital Mezzanine Management?
John Erickson and Thomas Bozzuto serve as co-Managing Partners and lead the firm's investment committee. Erickson, a former banker, and Bozzuto, representing the founding family, jointly approve all originated investments. A small team of analysts supports due diligence and portfolio monitoring.
Is Bay Capital structured as a single family office or a fund manager?
Bay Capital operates as a hybrid: it was initially the Bozzuto family's single-family office for mezzanine investments, but it also invests for external institutional investors and family offices. The firm does not have a permanent institutional capital base; rather, it structures each investment with a unique combination of the Bozzuto family capital and co-investment partners, effectively functioning as a deal-by-deal fund-of-funds and direct lender.
What investment stages does Bay Capital target?
Bay Capital focuses on the lower-middle market, specifically companies with $5-50 million in EBITDA requiring $5-20 million in mezzanine debt. It targets growth, acquisition, dividend recapitalization, and refinancing transactions, typically in sponsor-backed situations. The firm generally avoids early-stage or venture deals.
How does Bay Capital source proprietary deal flow?
Bay Capital relies on relationships with middle-market private equity sponsors, investment banks, and legal advisors in its Mid-Atlantic base. It also receives flow through its Bozzuto family network, including real estate and operating-company contacts. The firm is not a 'barbell' buyer of syndicated loans and does not compete in broadly syndicated loan markets.
Does Bay Capital participate in fund commitments or only direct deals?
Bay Capital primarily originates direct mezzanine debt investments, but it has also committed capital to select third-party mezzanine funds managed by other firms. This fund-of-funds activity supplements its direct lending and provides portfolio diversification.
What sectors does Bay Capital explicitly avoid?
Bay Capital generally avoids high-tech start-ups, early-stage biotech, pure oil & gas exploration, and consumer retail. It prefers business services, healthcare, government contracting, infrastructure, and select real estate-related mezzanine—industries where cash flows are predictable and collateral values are tangible.
Where does the underlying wealth come from for the Bozzuto family?
The Bozzuto family wealth originated from the Bozzuto Group, a major real estate development and management firm founded in 1988 by Thomas Bozzuto. The Bozzuto Group is one of the largest privately held apartment developers in the Mid-Atlantic. Bay Capital was established to deploy a portion of this family wealth into mezzanine investments outside real estate.
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