Evercore pulls BDC

A third business development company (BDC) launched by a US private equity firm has been pulled following KKR’s withdrawal and Blackstone’s postponement.

Los Angeles-based private equity firm Evercore Partners has withdrawn its proposed $240 million (€200 million) business development company (BDC) according to registrations filed with the Securities and Exchange Commission (SEC) this week.

The firm had hoped to raise up to $240 million for a public mezzanine vehicle, Evercore Investment Corporation.

The move is the latest in a succession of public offerings that have been either withdrawn or postponed by private equity firms. BDCs typically provide mezzanine debt, senior loans and equity tranches to mid-market companies.

Last week, Kohlberg Kravis Roberts announced plans to scrap its $750 million BDC in favour of raising a $780 million publicly-traded real estate investment trust, due to investor resistance.

In July, Blackstone Group delayed the IPO of its BDC, Blackridge Investment, reportedly over a dispute over who would pay the underwriting fee and also announced that it would reduce its target from $850 million to $650 million.

New-York-based Porticoes Investment Management recently lowered its target from $575 million to $200 million and also reduced its proposed management fees until the fund becomes fully invested.

The initial private equity frenzy for BDCs, which saw upwards of a dozen filings with the SEC for the publicly-traded mezzanine debt providers, appears to have waned.

Only two IPOs have taken place this year, the most significant one being Apollo’s launch of the $930 million Apollo Investment vehicle on April 6th this year.

The only other offering to successfully launch was the much smaller $96 million Prospect Energy Corp in July.

Enthusiasm for the sector appears to have waned with intensive negotiations reportedly taking place over management fees and the size of vehicles.