Darby Overseas Investments, the private equity arm of Franklin Templeton Investments, has closed its Darby Converging Europe Mezzanine Fund to new investors with total capital commitments
Darby Overseas Investments, the private equity arm of Franklin Templeton Investments, has closed its Darby Converging Europe Mezzanine Fund to new investors with total capital commitments of EUR248m.
After the expected refinancing of a EUR65m bridge loan, the final size of the fund is expected to exceed EUR300m, making it the largest dedicated source of mezzanine finance in central and eastern Europe. The Darby Converging Europe Mezzanine Fund extends mezzanine loans in countries that are already part of the European Union as well as those aiming for membership in the future.
‘Now that the fund is fully funded, we look forward to deploying more capital in what we believe is a highly attractive market for mezzanine, and its unique role in supporting expansion and acquisitions,’ says Darby chief executive Richard H. Frank. ‘These countries have a favorable investment climate due to continuing superior economic growth, spurred in part by the ongoing process of convergence with and integration into the EU.’
The fund has so far made five investments totaling EUR64m. Its most recent was a EUR20m commitment to a leveraged buyout of DDSG Cargo Group, a leading river transportation company based in Vienna.
Robert D. Graffam, Darby’s senior managing director for Europe, says: ‘Within our target region, which stretches from the Baltics to Turkey, we continue to pursue opportunities to provide risk capital to companies active in a broad range of sectors and sponsored by either financial investors or local entrepreneurs.’
Darby has played a pioneering role in bringing mezzanine finance, a hybrid of debt and equity, to emerging market regions, initially Latin America, then to Asia and more recently to central and eastern Europe.
The Darby Converging Europe Mezzanine Fund has also invested in AS Rigas Piensaimniekes, a Latvian dairy producer; UNO, an industrial bakery in Turkey; Ceske Radiokomunikace, a broadcast and alternative telecoms provider in the Czech Republic; and FiberNet Group, which offers cable television, broadband and telephony services notably in Hungary, Bulgaria and Ukraine.
Darby Overseas Investments was founded in 1994 by Nicholas F. Brady, who served as US treasury secretary between 1988 and 1993. In 2003 Darby became a wholly-owned subsidiary of Franklin Resources, the parent of Franklin Templeton Investments, which had a total of USD621.5bn in assets under management at the end of July.
