Indigo raises €550m in just four months

Indigo Capital, an independent mezzanine manager, has raised €550 million for its fifth European mezzanine fund – exceeding its €500 million target – in a swift fundraising.

European mezzanine manager Indigo Capital has closed its fifth fund on €550 million ($743 million). The fund, Indigo Capital V, has not begun investing yet while the firm is still investing its previous fund.

Investor appetite for mezzanine products remains undiminished. PEO today revealed exclusively that EQT, a Nordic private equity manager, is nearing a close on its second regional mezzanine fund on nearly €500 million.

Kevin Murphy, a founding director of Indigo, told PEO: “We could have raised much more than €550 million but we decided to be consistent with our previous funds and stay in the mid-market.”

The fundraising process took four months in which commitments were won from 25 investors – about 70 percent of which were existing investors who re-upped from the previous fund. The fourth fund closed in 2002 on €475 million with commitments from 20 investors – five of whom decided not to re-invest in the fifth fund.

Most, or 54 percent, of the fifth fund’s commitments came from pension funds while financial institutions contributed 21 percent, insurance companies 17 percent and governmental agencies 8 percent. A majority, or 54 percent, of the fund’s LPs are European while 28 percent are US.

Founded in 1999 as a spin-out from UK bank Kleinwort Benson, Indigo Capital offers mezzanine and junior capital to mid-market European businesses.