A new Century City private equity firm, Altaline Capital Management made its official debut earlier this month with its first deal – a “strategic growth investment” in Brazos Safety Systems.

While Altaline didn’t disclose the deal amount, the newly launched firm believes the investment in Brazos falls in line with its focus on partnering with lower-middle market companies in the technology, business services and financial services sectors, said Rafael Telahun, co-founder and managing director at Altaline.

Focusing on middle market companies may not attract a lot of hype, but it will define Altaline’s niche, Telahun said.

“When you think of places that are hot, like a Miami or an Austin, they tend to have newer businesses that just sprouted up,” he said. “We are focused on businesses that are established and are in year 10, year 15 or year 20. There happens to be a lot of them in Southern California. Being based (in Los Angeles) gives us an opportunity and an edge to chase those opportunities compared to the East Coast.”

Altaline will make $10 million to $50 million in equity investments in companies with an enterprise value below $150 million, according to the firm’s website. Brazos, a Fort Worth, Texas-based aviation technology company, has generated under $10 million in sales revenue, according to LeadIQ, a sales intelligence platform.

Brazos President Peter Henrikson said the investment from Altaline will help further the company’s research and development efforts. Brazos designs safety and analytics software for helicopters and airplanes, specifically it makes flight data monitoring and flight operations quality assurance software. Both systems identify and mitigate operational risk for aircraft.

“With Altaline’s support and strategic guidance, we are well-positioned to accelerate innovation, enhance our solutions, and deliver even greater value to our customers as we continue our mission to improve flight safety worldwide,” Henrikson said in a prepared statement.

Telahun added that Brazos “has all of the attributes we look for at Altaline, including a data-rich and mission-critical solution strong client momentum, a leading position in its market segment of focus and strong customer loyalty and satisfaction.”

Veterans in place

Altaline is a seven-person team, composed of private equity and finance veterans.  Specifically, Telahun was an investment professional at TA Associates. Ian Balmaseda, Altaline co-founder and managing director, worked at H.I.G. Capital; and the firm’s co-founder and principal, Brian Maher, is an alum of KKR & Co.

Half of the company’s staff is devoted operational support for companies, which can help clients better adopt to the challenges of a rapidly changing economy and technology, Maher said.

“We believe that our operationally oriented approach, combined with a deep sector expertise and a collaborative mindset, positions us to be a value-added partner to entrepreneurs and management teams,” he said.

Altaline should do well in a market like Los Angeles, which is one of the best hunting grounds for middle market companies, said Lloyd Greif, president and chief executive of Greif & Co.

“We may not have any Fortune 500 companies anymore,” he said, “but we have small and medium-sized, founder-owned and operated enterprises coming out of our ears.”

There are benefits from not chasing the most hyped companies, Balmaseda said.

“When there is a lot of capital chasing a few good companies, it is hard to find good deals,” he said.

“With fewer companies chasing deals (in a specific market), the chances of winning are higher.”