Currently there are 137 private equity fund managers exclusively focused on financing debt that incorporates equity-based options, such as warrants, with a lower-priority debt, according to Preqin's Fund Manager Profiles service. Collectively, these firms have raised approximately $61bn in capital commitments over the past 10 years and have an estimated $16bn of dry powder available for investment.
The vast majority of mezzanine firms are located in the US, accounting for just fewer than 69% of the total. The remaining 31% of mezzanine firms consist of 10 UK-based firms, 7 France-based firms, 4 Canada-based firms, and 22 firms located in other countries across the globe. The top three exclusively mezzanine-focused fund managers by total capital raised over the last decade, are Highbridge, Golub Capital and Prudential Capital Group.
Highbridge, the largest of the firms, is headquartered in New York with additional offices located in London and Hong Kong. The firm was founded in 1992 and is operated by Highbridge Capital Management, a global alternative investment and asset firm. Highbridge has collected just over $4bn in capital commitments over the last decade and holds an estimated $3bn in dry powder. Highbridge Mezzanine Fund II is the firm’s most recent mezzanine fund, closing on over $4.4bn in March 2013.
The second largest solely mezzanine-focused private equity fund manager, Golub Capital, has managed to raise seven mezzanine funds over the last 10 years and is currently in the process of raising two simultaneous mezzanine funds. The New York-based firm was established in 1994 and invests in middle-market companies in industries including manufacturing, business services, consumer products and services, food and beverages, aerospace and defence, and value–added distribution. The firm has managed to raise just over $3bn in capital from funds over the last 10 years and has an estimated $756mn in capital available for investment.
Prudential Capital Group is the third largest exclusively mezzanine-focused firm by total capital raised over the past 10 years. The Chicago-based firm have raised four mezzanine funds with the most recent, Prudential Capital Partners IV, closing above target on $1.15bn at the end of 2012. The firm’s investment philosophy is focused on middle market companies in traditional industries primarily in North America. Prudential Capital Group has raised just shy of $3bn in capital originating from funds over the last decade and holds an estimated $1.1bn in dry powder.