Three investors with private equity firm The Riverside Company are spinning out to hang their own shingle, which will be called Align Capital Partners. The plan is to invest in smaller companies than is now possible within Riverside, where even its latest “small-cap” fund is raising more than $500 million in capital commitments.
“It’s an amicable departure,” says Chris Jones, a Riverside partner who has been with the Cleveland-based firm since 2003. “We just want to go back to doing what we had originally done, and that makes more sense to do as a different firm.”
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Jones is launching Align with Steve Dyke, a Riverside partner for the past 16 years, and Rob Langley, who has been a principal with Riverside since 2010. Jones and Dyke will remain in Cleveland, while Langley will continue to work out of Dallas. All three will continue to manage certain existing portfolio responsibilities for Riverside. For example, Dyke and Jones both work with Arrowhead Electrical Products, which last week made an add-on acquisition.
Align is expected to make control investments in North American companies with between $3 million and $10 million in EBITDA, with what Jones refers to as “conservative leverage.” It has just begun raising its debut fund, but has verbal equity and debt commitments that could enable it to make certain “pre-fund” investments.