Intermediate Capital Group, a UK-based mezzanine specialist, has closed Europe’s largest specialist mezzanine fund with €2.25 billion of firepower.
ICG’s European Fund 2006, its fourth, has garnered €1.25 billion ($1.66 billion) of equity commitments and a further €1.0 billion (1.33 billion) of leverage, giving it a total firepower of €2.25 billion.
Nearly 70 percent of the equity has been committed by European investors, with 19 percent from Asia and the remainder from North America and the Middle East. More than three quarters of commitments came from existing limited partners.
The fund’s primary focus will be on investing in the mezzanine tranche of European buyouts, but it will also buy senior debt and mezzanine loans in the secondary market and could even be used for equity co-investments.
ICG held a first close in November and has now completed the fundraising process in time for its financial year-end tomorrow. The fund has already made five investments and has several more in the pipeline.
The fund is thought to be the world’s largest specialist mezzanine fund, beating the $2.7 billion (€2.0 billion) GS Mezzanine Partners III fund closed in 2006 by US bank Goldman Sachs.
Tom Attwood, managing director of ICG, said: “This is our fourth European mezzanine fund, increasing our capacity to offer private equity sponsors optimal financing structures in this dynamic market while providing attractive returns to our investors.”
ICG has Europe’s biggest specialist mezzanine team, employing 35 people in London, Paris, Madrid, Stockholm and Frankfurt. The company also has an Asia-Pacific fund, six CDO funds and a Credit Opportunities Fund.