PNC Mezzanine Capital has closed its latest fund, amassing $350 million (€293 million) in commitments for PNC Mezzanine Partners III LP. The fund surpassed a $300 million initial target before reaching its $350 million hard cap.
PNC Mezzanine is a unit of Pittsburgh, Pennsylvania-based PNC Financial Services and sits under the company’s PNC Equity Management umbrella. David Blair, a partner at the firm, founded the mezzanine group in 1989. He is joined by Brentwood Associates vet Preston Walsh, who is also a partner at PNC, and managing directors Robert Marsh and Douglas Brosius.
PNC is considered a middle market mezzanine player. The firm generally invests between $10 million and $30 million in each financing and can take lead positions of as large $40 million.
Speaking about the fund’s focus, Blair noted, “The middle market continues to provide an attractive environment for junior capital investing.”
Meanwhile, the mezzanine group’s parent PNC Financial Services has also made it a point to target the middle market. In addition to its mezzanine fund, the company has a private equity arm, PNC Equity Capital, that would qualify as a mid-market group and this past September, the company confirmed its focus when it acquired sell-side advisor Harris Williams & Co., a mid-market specialist.
On its website, PNC specifies that it will only finance companies with revenue in excess of $25 million and EBITDA over $5 million. The firm targets companies in the niche manufacturing, distribution and business services sectors.
This past year, PNC put $20 million into the recapitalisation of bakery Au Bon Pain and also financed the leveraged buyout of InterFace Solutions, a specialty paper maker.
The firm was one of a number of groups raising a mezzanine fund this year. Oaktree Capital Partners and The Blackstone Group are two of the bigger names currently raising mezzanine funds, while AEA Investors and Kelso & Co. are also reported to be putting similar vehicles together. Audax Group, another player that targets the mid market, is also prepping its next mezzanine fund.