Prudential Capital Partners has completed the fund raising for its fifth mezzanine fund, Prudential Capital Partners V, surpassing its target of USD1.4 billion.
Prudential Capital Partners is the middle-market mezzanine fund business sponsored by Prudential Capital Group, the USD78 billion private placement arm of PGIM, Prudential Financial’s global investment management business.
Fund V attracted a diverse set of institutional investors and closed fund raising with 34 investor relationships in reaching its hard cap. More than 70 per cent of existing investors re-committed to Fund V, many at higher amounts that brought the capital raise from existing investors to 96 per cent of prior fund commitments. Investors in the fund include corporate pension funds, insurance companies, fund-of-funds managers, foundations and family offices.
In keeping with Fund V’s more global investment orientation, the fund also experienced increased demand from non-US investors, with 28 per cent of total commitments coming from outside the US.
“We are very pleased that our middle-market enhanced credit strategy resonated with investors globally, who were seeking yield in a low interest rate environment,” says Jeffrey Dickson, managing principal of Prudential Capital Partners. “Our team’s continuity and consistent track record across cycles generated substantial demand, which became apparent when we were oversubscribed within five months, reaching our hard cap of USD1.825 billion.”
Prudential Capital Partners began offering Fund V, which closed in December, in April 2016 with an initial target of USD1.4 billion. With its fifth fund, Prudential Capital Partners has raised more than USD5.3 billion from institutional investors since launching its first mezzanine fund in 2001.
Prudential Capital Partners Fund V will follow an investment strategy consistent with its four predecessor funds: making investments ranging from USD10 million to USD100 million to fund acquisitions, recapitalisations, growth capital financings, and management led and sponsored leveraged buyouts for middle-market companies in traditional industries in North America. However, Fund V has expanded capacity to make investments in middle market companies within the UK and Western Europe.
“Fund V will have an expanded reach with investments in U.K and Western Europe based companies,” adds Dickson. “Our global sourcing network of 12 regional offices spans North America and Europe, providing clients with an intensely local face-to-face relationship approach to investing.”
For 2016, Prudential Capital Partners completed nearly USD260 million of investments across 11 manufacturing, services and distribution companies. It also had realisations for Funds II, III and IV, totalling USD265 million.
The investment professionals of Prudential Capital Group will co-invest alongside Fund V in each of its investments using a separate USD98 million vehicle.
