UK listed mezzanine fund provider Intermediate Capital Group has announced a final close on its sixth mezzanine fund at over €650m. Including leverage, the fund will be boosted to €1bn, which is over three times the size of the group’s previous fund.
John Manser, ICG chairman, said: “Last year saw a significant advance in the scale of our fund management activities. The closing of our new mezzanine fund, with a total expected size, including leverage of well over €1bn, will lead to substantially increased profitability from this part of our business.”
ICG sees significant opportunities for mezzanine in the current climate with a strong European buyout market and an increasing demand for mezzanine. Last year an inactive high yield bond new issue market resulted in an increased number of mezzanine opportunities in large transactions. Pricing, according to Manser remained satisfactory with no erosion of cash margin. There was also an increased use of warrantless mezzanine with minimal prepayment penalties.