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US-Based Mezzanine Private Equity Fund Managers

by Jessica Duong

  • 11 Jul 2012
  • PE

Currently, 237 fund managers based in the United States incorporate a mezzanine private equity strategy into their investment focus. Collectively, these firms have raised $486bn over the last 10 years, and have over $130bn available in estimated dry powder.

The top five US-based private equity fund managers that specifically invest in mezzanine private equity opportunities, ranked by aggregate capital raised over the last decade, are: Kohlberg Kravis Roberts, Goldman Sachs Merchant Banking Division, Carlyle Group, Blackstone Group and Oaktree Capital Management.

Kohlberg Kravis Roberts, headquartered in New York, specializes in leveraged buyout transactions. However, they raised their first mezzanine vehicle in 2010, which closed on target on $1bn. The fund primarily targets mezzanine investments as part of leveraged buyouts, other private equity sponsored transactions, recapitalizations, refinancing and growth financing for large-capitalization, and middle-market companies located in North America, Europe, Asia and Australia. The firm, which has always had a global reach, has raised $56.8bn in the last decade. KKR has an estimated dry powder of $14.5bn.

Goldman Sachs Merchant Banking Division engages in a number of different private equity strategies, from buyout, to distressed debt, to mezzanine financing. Since 1996, Goldman Sachs has had a dedicated mezzanine fund family, raising more than $28bn in capital (including leverage) through five mezzanine private equity vehicles. The group invests in a diverse range of industries, principally in the Americas and Europe.

Carlyle’s Corporate Mezzanine group primarily invests in senior subordinated notes with warrants, preferred stock, and minority common equity securities. The Corporate Mezzanine team invests in privately negotiated junior debt and equity securities of middle market and large cap leveraged buyouts, recapitalizations, and growth financings. The team are currently managing two funds, Carlyle Mezzanine Partners (CMP) and Carlyle Mezzanine Partners II (CMP II), which collectively have raised almost $1bn in capital commitments.

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