DB Capital Partners sets up $1bn mezzanine fund

The fund has been set up to help companies looking for alternative sources of debt financing.

DB Capital Partners, a private equity affiliate of Deutsche Bank, has launched a $1bn (E1.1bn) Mezzanine Debt fund for investment in North American and Western European companies.

Explaining the move into mezzanine finance, Charles Ayres, head of DB Capital Partners in North America, said: “DB Capital Partners has always sought out creative ways to finance high-potential companies. The mezzanine fund is a logical extension of our efforts.”

The fund, DB Capital Mezzanine Partners, will be raised drawing on DB Capital Partners’ clients, Deutsche Bank’s investment banking relationships, and external relationships with sponsors, investment and commercial banks, as well as other mezzanine funds for its investments.

Greg Margioles, managing director of the new fund, said: “DB Capital Mezzanine Partners was established to capitalise on the excellent opportunities that exist in the mezzanine market as a result of the evolution of the high yield and leveraged loan markets. The resulting financial void for many of our clients provides an opportunity for us to achieve superior risk adjusted returns on mezzanine investments while simultaneously helping meet the capital requirements of Deutsche Bank’s clients.”

DB Capital Partners has already made 5 mezzanine investments totalling over $95m.