Nordic Mezzanine has continued the spate of recent successful mezzanine fundraisings with an above target final close for its latest fund.
The firm has announced that Nordic Mezzanine Fund II, the firm’s second fund, has secured commitments totaling E240m, ahead of the original target of E200m. The investor base consists of Nordic institutions, mainly pension funds and life assurance companies, although the firm declined to identify the fund’s LPs.
Nordic Mezzanine Fund II becomes the latest mezz fund to raise funds quickly – and without the use of a placement agent. “Fundraising was completed within a year,” said Vesa Suurmunne, the firm’s chief executive. “The situation is different to our debut fund, which was raised in 1999 and 2000 when mezzanine was not as well known.”
Asked as to why mezzanine has proved so popular with investors in recent times, Suurmunne said he believed that a combination of economic factors and prudent investing are the most important factors. “When the economy is not performing so well, people respect the low risk, high return investment that mezzanine provides. It is also very important to have a portfolio in very good shape.”
In February, Nordic Mezzanine underwrote a mezzanine loan facility for the buyout of Finnish stone wool insulation products maker Paroc, a deal led by Bank of America Private Equity Partners. “Dealflow has been particularly strong since April and we hope to complete a further deal in the near future,” says Suurmunne.
The fund will look to make between ten and twelve investments, typically investing E25m per transation. The fund is structured as an English limited partnership and managed by Nordic Mezzanine UK. The manager has offices both in London and Helsinki. Nordic Mezzanine now has over E340m under management in the two mezzanine funds.
SJ Berwin provided legal counsel for the fundraising.