European Capital lays out plan

American Capital, the publicly traded buyout and mezzanine fund with capital resources of approximately US$5.2bn, has outlined the investment plans for its European subsidiary.

European Capital will invest in private equity buyouts and provide capital directly to private and mid-sized public companies. Individual investments will range from €5m to €125m per deal in equity, mezzanine and senior debt to fund growth, acquisitions and recapitalisations.

American Capital will provide a majority of the initial committed equity capital for European Capital, which is headquartered in Paris. The target amount is around €600m, with a proportion likely to be raised from third-party institutional investors. The equity commitments are expected to be drawn down by European Capital over a two to three-year period to fund its investments and operations.

European Capital is also expected to borrow funds in support of its investment, while American Capital may provide direct loans to its subsidiary or limited credit enhancements for some of the borrowings. European Capital may eventually undertake a public offering of its equity securities.

Jean Eichenlaub joined European Capital in May as a managing director. For five years prior, he was deputy managing director at Lazard’s private equity subsidiary, Fonds Partenaires-Gestion. He has led mid-cap private equity transactions in the health, light industry and manufacturing, specialised distribution and hospitality sectors to an aggregate of more than €500m in the French market.

Jacques Pancrazi also joined European Capital from Fonds Partenaires-Gestion last month as a principal. Previously, he was involved with portfolio management and financial performance monitoring, in addition to several restructuring assignments.

Roland Cline, another MD at European Capital, had worked as a principal at American Capital since 1988.