ICG announces first closing for new fund

Mezzanine provider Intermediate Capital Group has announced the first closing for its new European fund.

ICG European Fund 2006 closed with initial commitments of €650m and an associated debt facility of €900m. The firm hopes to announce a final closing in the New Year with target equity commitments of €1.25bn. With leverage, the fund should have a total capacity of about €2.25bn

The closing comes as ICG announces its results for the six months to September 30 2006. These show a record level of financings of £736m in 19 companies, with funds under management increasing to €4.7bn. Gains on investment were £93.3m.

France was the firm’s busiest market, although it completed deals across Europe and its first in New Zealand. The firm predicts that the Asia Pacific LBO market will lead to increased opportunities for mezzanine investors given levels of activity from European and North American investment houses in the region.

Chairman John Manser pointed out that high levels of buyout activity across the continent mean there is an increased demand for mezzanine; more than €10bn was arranged or provided during the first nine months of 2006 compared with €8.9bn during all of 2005.

ICG’s investments during the six months included the buyout of Iberostar, a Spanish tour operator, in which it provided mezzanine finance of €100m and invested €10m in the equity; the buy-out of French medical diagnosis equipment manufacturer Sebia, in which it provided €60m in mezzanine and invested €30m in the equity; and the tertiary buy-out of German fire protection system supplier Minimax.