Nordic Mezzanine has so far raised E196m for its Fund II on its way to a planned eventual closing of E240m.
According to Nordic Mezzanine chief executive Vesa Suurmunne, the fund is aiming for E240m for its final closing, which will take place as soon as possible. He said the firm had already received a number of pledges from investors that should ensure the final target is reached.
The fundraising was mainly backed by Nordic investors, with a high proportion of pension funds and life insurance companies and also some family sources. The firm had expressed the hope of raising capital from UK and continental European sources following the E150m first closing of the fund in January 2003.
The use of mezzanine has been increasing around Europe in light of favourable conditions. “Mezzanine has been employed through the turbulent environment of the last two years and has proved less risky than venture capital. You get a high return for fairly low risk and investors value that together with the running yield which gives them cash flow,” said Suurmunne.
Fund II will seek to make around 10 to 12 investments of between E15m and E25m in mid-market buyout and expansion capital situations in the Nordic region and Germany.
In February Nordic Mezzanine underwrote a mezzanine loan facility for the buyout of Finnish stone wool insulation products maker Paroc, a deal led by Bank of America Private Equity Partners.