According to Preqin’s Funds in Market Product, there are currently 61 mezzanine funds on the road, which are collectively targeting over USD 22 billion for investment in a range of industries and locations. 48% of these funds have held at least one interim close and have aggregate commitments of USD 6.4 billion to date.
The average fund size of such funds is USD 365 million, and three vehicles are targeting USD 1 billion or more; the GSO Capital Opportunities Fund II, ICG Europe Fund V and NYLIM Mezzanine Partners III fund. The largest fund in market is the GSO Capital Opportunities Fund II, a Cayman Island-domiciled fund managed by Blackstone Group. The fund is seeking USD 3 billion in capital commitments, and has raised just over half of the target during a first close in June 2011. The fund primarily invests in privately negotiated transactions, including LBOs, recapitalizations, refinancings, growth financings and add-on acquisitions.
The majority of these mezzanine funds in market are North American-focused, with 62% of the 61 funds predominantly targeting investments in the region. 23% of the funds are Europe-focused and the remaining 15% are focused on Asia and Rest of the World regions, including Africa, the Middle East, Latin America, Australia, Israel, Brazil, China, and Japan.
Preqin’s data shows that 21 mezzanine funds have reached a final close in the last 12 months. The largest of these closed mezzanine funds is the EIG Energy Fund XV, which raised USD 4.1 billion in 14 months. The fund is part of a series managed by EIG Global Energy Partners that looks to invest in asset based energy and energy-related infrastructure projects on a global basis, but with a particular focus on OECD countries. The vehicle has a bias for mezzanine debt, alongside an allocation to equity.