New York Life’s PE arm closes $800m mezz fund

New York Life Capital Partners has doubled its capital and LPs for its second mezzanine fund, as demand for mezzanine debt soars amid a credit liquidity freeze.

New York Life Capital Partners, the private equity arm of New York Life Investment Management, has closed its second mezzanine fund on $800 million (€545 million). The fund was significantly oversubscribed, exceeding its initial target of $600 million.

The fund is more than twice the size of its predecessor, which closed on $475 million in 2002. The vehicle also has twice as many limited partners, having secured commitments from 22 investors including US pension plans, domestic and overseas insurance companies, and institutional investors from Europe, Asia and the Middle East.

The vehicle has already made 11 investments, and has deployed around 30 percent of its capital.

New York Life Capital Partners typically invests in subordinated debt associated with leveraged buyouts of middle market companies in the US and Europe, holding between $20 million and $50 million for each deal. The firm is sector agnostic..

The liquidity crisis in the credit markets has been a boon for mezzanine shops. As cheaper instruments such as second lien disappeared from deal structures this summer, demand for mezzanine increased dramatically.

Major European private equity investor AlpInvest recently received a €2 billion mezzanine mandate from Dutch pension funds ABP and PGGM, one of the largest mezzanine mandates ever awarded.