The shop, which launched its fund-raising efforts for Maranon Mezzanine Fund LP in early 2008, is targeting $250 million. It held a first close at roughly $93 million in July 2008, and has already secured another $45 million in commitments that it’s yet to close on, the source said.
Expectations for the size of the next close aren’t clear just yet, the source said, as the firm currently has roughly four to five other potential pledges in the works. Ideally, the firm hopes to avoid holding a second interim close and aims to wrap up the fund in a final swoop this fall.
The Teachers’ Retirement System of Illinois made a $25 million pledge to the fund in mid-June as part of its emerging managers program. The pool’s mix of limited partners includes other state pension plan sponsors, insurance companies and family offices, the source said.
Maranon Capital executives were unavailable for comment.
The firm was formed in 2007 by Tom Gregory and Ian Larkin, both of whom previously worked together at business development company American Capital Strategies Ltd.
The progress on the fund follows circulation among LPs earlier this year of a report produced by Maranon Capital that examines the market for mezzanine investing.
In the report, the firm said it expects a significant portion of its investments in the next two years would come from refinancing the “over leveraged and under priced loans” originated from 2005 through 2008, and argued that fund-raising for mezzanine funds serving the middle market hadn’t been as robust as commonly accepted. It noted that 69% of the overall mezzanine capital raised in 2008 went to three mega-mezzanine funds that don’t participate in the middle market.
By Maranon Capital’s calculations, middle-market mezzanine firms raised just $2.9 billion in 2008, an increase of 15% from the 2007 total of $2.5 billion. —Michael Baron
Fireman Capital Considers Institutional Fund
Fireman is currently investing from a $60 million friends-and-family fund, which is being supplemented by an undisclosed amount of additional capital from the Fireman family.
Paul Fireman, whose official title is chairman, is not involved in the operational day-to-day, but is expected to work regularly with portfolio companies on strategy.
His son, Dan Fireman, is one of the firm’s three partners, while there also are a pair of directors and a number of operating partners. One of those operating partners is Stacy Madison, who sourced the firm’s investment in Hudson Jeans, which is the firm’s first consumer investment. —Dan Primack
Birch Hill raising its fourth fund