At present there are 63 mezzanine private equity funds on the road, which are collectively targeting over $25bn in capital commitments. Twenty-seven of these funds have held at least one interim close and have raised almost $5bn to date. The majority of these mezzanine funds in market are focused on investment in North America, with 57% of the 63 funds predominantly targeting investments in the region. Twenty-five percent of the funds are chiefly Europe-focused, and the remaining 18% are targeting investment in Asia and Rest of the World countries.
The average fund size of such funds is £398mn, with four vehicles that are targeting $1bn or more; Highbridge Mezzanine Fund II, Crescent Mezzanine Partners VI, ICG Europe Fund V and Prudential Capital Partners IV fund. The largest fund in market is Highbridge Mezzanine Fund II, which is seeking $3bn in capital commitments. The vehicle primarily invests across North America with a significant allocation to European opportunities, and has no specific industry focus.
Preqin’s data shows that 28 mezzanine funds have reached a final close in the last 12 months. The largest of these closed mezzanine funds is GSO Capital Opportunities Fund II, which raised $4.1bn. The fund, being raised by Blackstone Group’s credit arm GSO Capital Partners, invests in privately negotiated transactions, including LBOs, recapitalizations, refinancings, add-on acquisitions and growth financings.