ABN AMRO pulling out of mezzanine

ABN AMRO Capital, the private equity arm of the Dutch bank, has decided to withdraw from the mezzanine market and is therefore closing ABN AMRO Mezzanine. Sources close to the firm said that a strategic decision had been taken for ABN AMRO Capital to focus on developing its European buyout business and that the mezzanine business was regarded as non-core and low margin.

This means that ABN AMRO Mezzanine will only continue to exist whilst current investments are worked through and the unit's managing director, Barrie Moore, plus two other members of the team are said to have already left. John Sealey will remain during the winding down period.

The firm has therefore terminated its second mezzanine fund – The Second ABN AMRO Mezzanine Partnership LP – which was launched in March 2000 and closed at $150m in October 2001. ABN AMRO was a cornerstone investor in this, committing $50m.

ABN AMRO Mezzanine (UK) was established in 1996 and acted as investment adviser to the two Guernsey-based mezzanine funds. The company’s investment team comprised individuals who, for seven years, were responsible for mezzanine investing at NatWest Markets prior to joining ABN AMRO.

Historically, the unit's first fund had invested in mid-market mezzanine transactions with an average investment size of approximately £5m and an underwriting capacity up to £20 million. The doubled size of the second fund had prompted the unit to predict that its underwriting capacity would rise to £35 million, although transactions would continue to be in the mid-market.