Euromezzanine raises €660m for fund 5

Paris-based mezzanine fund manager Euromezzanine Conseil has held a final closing of its fifth vehicle on €660 million ($827 million), exceeding its original target of €600 million.
 
Louis Vaillant, senior partner at Euromezzanine, said in an interview that the firm held a first close of the fund on just over €300 million last July. 
 

We invested fund 3 in three-and-a-half years, fund 4 in three years, and we expect to invest fund 5 in between three and four years, so there is no change in our strategy. Louis Vaillant, senior partner, Euromezzanine Conseil

Commitments to the fund came from historical co-sponsors BNP Paribas and Natexis Banques Populaires as well as a number of previous investors. Vaillant said the majority of placements came from French institutional investors, along with commitments from other European countries. The firm has no plans to extend its investor base outside of Europe, he added.
 
Vaillant said the €212 million Euromezzanine 3 and €427 million Euromezzanine 4 are now fully invested. Fund 3 stopped investing in October 2002, having deployed mezzanine funding in 22 transactions, while fund 4 had invested in 26 deals by December 2005.
 
Euromezzanine 5 will underwrite mezzanine tranches of between €6 million and €90 million in 30 to 40 predominantly French transactions. The fund will focus on investments in mid-market companies with enterprise values of between €50 million and €500 million.
 
Despite the increase in fund size, Vaillant said the firm remains focused on the mid-market. “We occasionally do large transactions, but we don’t generally want to go into that space. There are more opportunities in the mid-market, more deals and increased deal sizes. We invested fund 3 in three-and-a-half years, fund 4 in three years, and we expect to invest fund 5 in between three and four years, so there is no change in our strategy.”
 
Euromezzanine 5 has already made investments in six deals to date, including Industri Kapital’s purchase of French pre-cast concrete producer Bonna Sabla from Axa Private Equity last August; the acquisition of French hardware products business Tréfilaction by Pragma Capital and CIC LBO Partners from CDC Enterprises and Banexi Capital Partners in Feburary 2006; and Franco-German investor Alpha Group’s buyout of baking ovens manufacturer Mecatherm from 21 Centrale Partners, Astorg Partners and Copega earlier this month.