Capiton, the German development capital firm that span-out of Gothaer Insurance at the end of May, has announced plans to launch a mezzanine fund. The Berlin- and Stuttgart-based firm believes the mezzanine market has significant growth potential, especially in situations where entrepreneurs are looking for financings that do not entail new third party shareholders.
Stefan Theis, managing director of Capiton, says: “These mezzanine activities will only be a viable business if the pricing of mezzanine capital properly reflects the associated risks and if this mezzanine capital can be packaged and placed on the capital markets as a structured product, for example in the form of CMOs (collateralized mezzanine obligations).”
Capiton currently manages a private equity portfolio of around €600m across 35 investments, primarily in German-speaking countries in the sectors of healthcare, special mechanical engineering, logistics, communication and software.
The firm is 60% owned by management and the supervisory board following May’s MBO. Employees hold 20%, Gothaer holds 10% and the remaining 10% is being kept back for a potential strategic partner.