Mezzanine Management’s CE fund ready to invest

The first mezzanine fund to focus on the Central European region has held a first closing at E76m.

Accession Mezzanine Capital, the mezzanine fund launched by Mezzanine Management which is looking to focus on investment opportunities in Central Europe, has held a first closing at E76m.

The fund is looking to invest in ‘old economy’ companies with enterprise values of between E50m and E200m. It is specifically targeting deals in Poland, Hungary, Czech Republic, Slovenia and Slovakia, countries it sees as being amongst the next wave of EU entrants, and looking to invest E5-15m per transaction.

Investments in the fund, which has been in the market since early 2001, have come from institutional investors in Europe and the US, including the European Bank for Reconstruction and Development, which in 2001 committed to provide up to E37.5m of the fund’s maximum target of E150m.

Christian Marriott at Mezzanine Management said that fundraising had been successful, adding that mezzanine was still not entirely embraced by all institutional investors. “It (mezzanine) is still seen by some as a fairly niche form of financing although there is a good number of institutions still looking to commit to the fund.” He said the firm, which covers Eastern Europe from offices in Vienna and Warsaw, was looking to make its first investments during the summer.

Mezzanine Management director Rory Brooks said that market conditions in Central Europe were more favourable now than they had been for many years. Franz Hoerhager, managing director of Mezzanine Management Central Europe, added that the rapid development of the markets in Central Europe meant that the fund had ‘an excellent opportunity to introduce mezzanine finance to the region’.

Mezzanine Management was established in 1988 and Accession Mezzanine Capital is the firm’s fourth fund. Its first fund, First Britannia Mezzanine NV, raised £200m in 1989 for mezzanine investments targeting France and the UK. In 1996, the firm launched the International Mezzanine Investment which raised $450m for investments in Southern Europe, Scandinavia and Germany. The firm’s third fund, Mezzanine Management Fund III raised $530m for investment in Western Europe and the US.