Short-term mezzanine investor Brooks Houghton & Co is to launch a $150m generalist fund targeting investments in the US.
The New York firm has appointed Far Hills Group as placement agent for the fund, which is looking to hold a first closing at $25-30m at the end of Q3. Far Hills will seek commitments from the US and Europe, with European institutions likely to comprise between 33-50 per cent of overall commitments.
The fund will look to invest between $10-15m in short term mezzanine financing across all sectors excluding oil and gas, mining, real estate and restaurants, which Brooks Houghton partner Gerald Houghton feels are too difficult to monitor over a short period of time. “We set an 18 month maximum timeline for our investments, with most investments completed within one year.” The firm’s first fund, the $40m BHCIF I had an average turnover time of 7.3 months on its investments.
The fund will target new investors in Europe and the US to add to a large number of repeat investors from Fund I, which Houghton describes as having performed ‘extremely well’. “The larger fund will enable us to get involved with some much bigger transactions-' says Houghton, “deals that we had to leave on the table with the previous fund will now become accessible.”
Houghton is confident of achieving the $150m target for BHC Interim Funding II. No investments have been made to date, although the firm is currently exploring opportunities in the US. US firms are increasingly targeting European investors as US investors become more cautious. Figures for Q2 saw US venture capital commitments drop to $4.6bn, the fourth quarterly fall in succession.