The private equity arm of Lehman Brothers, the global investment bank, has announced the final closing of its debut mezzanine fund dedicated to Europe, Lehman Brothers European Mezzanine Fund 2003, on €750 million ($900 million).
The fund exceeded its original €500 million target and received €150 million from Lehman Brothers. There were “well over 30” other investors in the fund, although the firm declined to give further details.
The fund’s primary focus will be on companies with enterprise values of more than €400 million and will invest exclusively in Europe. The fund will look at a wide range of sectors, including manufacturing, retail and distribution – “operating companies with assets, good cash flow and based on ‘bricks and mortar’”, according to managing director Christopher Cooke in an interview with PrivateEquityOnline.
Approximately €200 million has been invested to date from the fund in 12 companies, including commitments to Halfords, the UK car and bicycle accessories chain and Dignity, the funeral directors.
Julian Entwisle, managing director of Lehman Brothers and principal of the fund, said in a statement: “The successful raising of our first European mezzanine fund helps to address the shortfall in dedicated intermediate capital that is required to finance leveraged buyouts in Europe.”
Cooke has been appointed to work alongside Entwisle in administering the fund. He joins from the firm’s fixed income division and becomes a managing director.
Last month, Intermediate Capital Group, the listed UK-based provider of mezzanine finance, closed its latest fund on €668 million. Last September, Goldman Sachs, the global investment bank, closed the largest-ever global mezzanine fund on $2.7 billion.