There are currently 38 mezzanine private equity vehicles with a North America-focus in market seeking investor capital. Collectively, these funds are targeting $14.5bn in capital commitments. 47% have already had at least one interim close and aggregate commitments for these funds currently stand at $4.5bn. The average fund size of the North America-focused mezzanine funds in market is $414mn, with 11% of these vehicles aiming to raise $1bn or more.
The largest mezzanine fund currently in market is the GSO Capital Opportunities Fund II, which is being raised by Blackstone Group. The vehicle is seeking $3bn and primarily invests in privately negotiated transactions, including LBOs, recapitalizations, refinancings, add-on acquisitions and growth financings in North America and West Europe.
As of August, six North America-focused mezzanine funds have reached final close in 2011 having raised an aggregate $6.6bn. Of these, the largest fund is the $4.12bn EIG Energy Fund XV. The fund, managed by EIG Global Energy Partners, invests in asset-based energy and energy-related infrastructure projects on a global basis, with a focus on OECD countries. The fund has a bias for mezzanine debt but with an allocation to equity.
Audax Mezzanine Fund III is the second largest mezzanine vehicle focused on investment in North America to close in 2011, having raised $1bn. The fund managed by Audax Group focuses on a range of industries including healthcare, aerospace/defence, consumer products, manufacturing, logistics, and educational services.