First close for new Asian mezz fund

Kendall Court Capital Partners has announced a first closing on $35m for its debut Asian mezzanine fund. The fund has a final target of $75m.

Kendall Court Capital Partners, the Asian mezzanine start-up, has announced a first closing of Kendall Court Mezzanine (Asia) Fund I on $35 million (€26 million).

In a statement, the firm said investors in the fund “comprise of institutional investors based in Europe and the US” but declined to name them. The firm added that it had only launched the fund in June 2004 and hoped to reach the final target of $75 million within the next year.

The fund will provide $5 million to $10 million in mezzanine financing for buyout, recapitalisation and expansion capital situations, with a primary focus on mid-sized companies in Southeast Asia and on supporting financial sponsors across Asia as a whole.

“Asia’s investing environment is currently conducive for mezzanine – companies’ continuing aversion to further equity dilution, volatile capital markets, cautionary bank lending environments, a growing private equity market, a relatively non-existent high yield market for mid-market companies, are all factors contributing to demand for mezzanine in our targeted space,” said Chris Chia, Kendall Court managing partner.

Kendall Court partner Dennis Wuisan says the firm’s view is that there is a gap in the market for a broader range of mezzanine provision in Asia, where mezzanine has traditionally been associated with pre-IPO bridge financing. He says the firm will seek to introduce longer-term quasi-equity or quasi-debt securities such as convertible bonds, preferred shares and subordinated debt with warrants.

Kendall Court currently comprises three founding partners: chairman and managing partner Yeo Kar Peng, who was previously managing director and head of Malaysia investment banking at Citigroup Global Markets; managing partner Chris Chia, formerly a vice president at Citigroup Global Markets Southeast Asia investment banking division (with responsibility for Malaysia and Singapore); and partner Dennis Wuisan, who worked in the investment banking division of Goldman Sachs in Singapore.

In a statement, Kendall Court says its is currently seeking to establish local teams in Singapore, Malaysia and Indonesia.