Providers of mezzanine capital, which in financing structures for leveraged transactions occupies an intermediate position between equity capital and senior debt, continue to benefit from strong investor appetite for their product.
Euromezzanine, the French mezzanine firm, has announced the final close of its fourth fund, exceeding the original E400m target to close on E427m.
French banks BNP Paribas and Natexis Banques Populaires returned as co-sponsors for the fund in addition to many of the firms existing investors. In a statement, the firm added that it had broadened its existing investor base with a number of new LPs, including insurance companies, asset managers, pension funds and banks. Several family offices and funds of funds also participated.
Euromezzanine was advised by Crédit Agricole Indosuez on the fundraising of Euromezzanine 4.
The firm's closing follows successful mezzanine fundraisers recently by Goldman Sachs Mezzanine Partners, which in September closed a $2.7bn vehicle, Mezzanine Management and Intermediate Capital Group, which held a E250m first close of its sixth fund last week.
Euromezzanine's new fund will be used to underwrite mezzanine tranches of between E5m and E80m in companies with an enterprise value ranging from E50m to E500m. The bulk of the firm’s investments are expected to take place in France, although investments can be made across Europe.
Since its inception 13 years ago, Euromezzanine has completed 87 mezzanine investments among which 57 have been realised as of today. Euromezzanine 4 has already made 6 mezzanine investments in 2003. Euromezzanine 3 completed its investment programme at the end of 2002.
The firm’s most recent investment was a E50m participation in Industri Kapital’s buyout of Ceva, a developer of animal nutritional products from PAI. The value of the transaction was not disclosed.
Mezzanine financing has proved to be an increasingly popular part of the market with investors and financiers alike. Data published last week by Initiative Europe revealed that in the six months to June 2003, mezzanine involvement in European buyouts stood at just over E3bn, a 97 per cent increase on the same period in 2002.