There are 162 private equity fund of funds vehicles currently in market, with 15% looking to commit capital to mezzanine funds. Two thirds (67%) are being raised by managers based in North America, 21% are managed by European GPs, and the remainder are being raised by fund managers outside of these regions.
Preqin’s Investor Intelligence online service shows that 46% of funds of funds currently in market with a preference for mezzanine vehicles will look to commit capital to emerging markets, including India, China and South America. This suggests that investors continue to use fund of funds vehicles as a tool with which to enter new markets that may otherwise be inaccessible. Twenty-nine percent of funds of funds investing in mezzanine vehicles will target North America, with the remaining quarter focusing on Europe.
The largest private equity fund of funds vehicle currently in market with an investment preference for mezzanine vehicles is BlackRock Private Equity Partners VI. The fund, raised by BlackRock Private Equity Partners, is targeting $650mn, and will commit to mezzanine and distressed private equity funds managed by well-established firms across a range of geographies.
Among the top three largest funds of funds currently fundraising with an interest in investing in mezzanine vehicles is Mesirow Financial Private Equity Partnership Fund VI. The fund, raised by Mesirow Financial Private Equity, has a target size of $500mn, and will predominantly make commitments to North America-focused funds. It will also allocate up to 25% of the fund’s value to vehicles targeting Europe.
WP Private Debt Fund Strategy III is also aiming to raise $500mn, making it one of the largest funds of funds currently in market that targets mezzanine fund investment opportunities. The vehicle, raised by WP Global Partners, will commit to funds targeting North America, Europe and Asia.