Syntaxis reaches first close on new Central Europe mezz fund

Central European mezzanine group Syntaxis Capital has reached a first close of €140m for its second Central European mezzanine fund, SMF II. This is just over half its targeted amount of €250m.

SMF II is the successor to the firm’s maiden fund, which reached a final close at the end of 2008, raising just under €120m and is now largely invested. The European Bank for Reconstruction and Development, the anchor of the Syntaxis’s first fund, also anchored the second, alongside the European Investment Fund.

Investors in Syntaxis’ first fund included the EBRD, Unicredit, MassMutual/Babson Capital, Etera, Pohjola, VCM (Sal Oppenheim) and the French Caisse des Depots. A good proportion of Finnish investors committed to the specialist fund. Managing partner Ben Edwards describes the Finnish LPs as having a particularly good understanding of mezzanine. He added that a meaningful percentage of Fund II first closers had re-upped into Fund II.

Speaking to EVCJ, Edwards said: “It’s a tough fund raising environment, but we have a good story to tell and plenty of time before we reach our final close. As we did with Fund I, we expect that we’ll be investing Fund II commitments while we continue fund raising, demonstrating the attractions of the product and region while we go.”

Syntaxis Mezzanine Fund II’s investment strategy is identical to Fund I’s, providing junior capital to mid-market private companies in the new European Union member-states of Central Europe.