JZ Capital Partners Ltd on Thursday said it will soon return about $40 million to shareholders, and announced a new $20.5 million investment into JZHL Secondary Fund LP.

The investment company focused on US and European micro-cap companies and US real estate said it agreed to invest up to approximately $20.5 million into JZHL, which is managed by an affiliate of its investment manager Jordan/Zalaznick Advisers Inc.

JZ Capital said other investors including Hamilton Lane Advisors LLC will also contribute, bringing the total investment in JZHL to at most around $33.3 million and leaving JZ Capital with a 61.5% interest in the secondary fund.

JZHL is to use the funds for an investment into a newly incorporated company related to ACW Flex Pack LLC, an industrial packaging company based in Green Bay, Wisconsin. The new company’s purpose will be to make acquisitions complimentary to Flex Pack’s business.

The secondary fund holds an existing interest in Flex Pack which it purchased from JZ Capital over three years ago, alongside interests in other US microcap companies.

JZ Capital will propose the investment for approval at an extraordinary general meeting to be held on May 8.

Also on Thursday, JZ announced its intention to begin returning capital to shareholders, with an initial payment of approximately $40 million.

JZ said it currently believes a redemption of its ordinary shares will be ‘the most appropriate form and mechanism’ for this initial return.

The company will, it added, ‘to assess its ability to make further returns of capital...and will seek to do so as and when it has sufficient cash reserves that are not otherwise required to support its existing investments’.

Shares in JZ Capital rose 1.0% to 200.00 pence on Thursday afternoon in London.

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