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Morgan Stanley raises USD1bn for second mezzanine debt fund

Morgan Stanley Credit Partners has raised USD1 billion for Morgan Stanley Credit Partners II, the firm’s second investment vehicle targeting corporate mezzanine debt and related instruments issued by middle market companies in North America and Western Europe.

“This significant capital raise for Morgan Stanley Credit Partners speaks to the strength of the team’s rigorous, credit-centric investment approach and the strong investment performance they have achieved,” says Ed Moriarty, Head of Merchant Banking & Real Estate Investing. “Our clients appreciate the differentiated approach Credit Partners brings to this opportunity set as well as the benefits the team maintains by being part of the Merchant Banking & Real Estate Investing platform, including access to Morgan Stanley’s global network as well as resources dedicated to providing best-in-class operations, risk, reporting and client service.”

Investors in the new fund comprise leading global institutions and high net worth individual investors as well as Morgan Stanley and the fund’s investment team. The institutional participation in the fund is more than double the size by dollars compared to its predecessor fund, and the fund has already invested more than USD144 million in four portfolio companies.

“Our clients recognise that mezzanine debt presents a compelling investment opportunity, and we are pleased with the strong support we have received from a wide range of investors,” says Hank D’Alessandro, Managing Director and Head of Morgan Stanley Credit Partners. “Our Credit Partners investment team continues to focus on finding investment candidates that have leading market positions and generate strong free cash flow and returns on invested capital. We bring a partnership approach to our relationships with financial sponsors and management teams, and look for investment opportunities where the companies that join our portfolio can benefit from the access to the network and resources of a global financial services firm.”

Morgan Stanley Credit Partners is an investment platform for mezzanine debt and related instruments issued by middle-market companies in North America and Western Europe. Through a rigorous credit-centric and disciplined investment process, Credit Partners seeks to create value as a long-term partner for financial sponsors and companies throughout an investment’s life-cycle. The team’s experienced professionals have extensive industry relationships and significant expertise in investment origination, deal structuring, credit analysis and principal investing in the leveraged finance markets. Credit Partners also leverages the brand and unparalleled global network of Morgan Stanley to source investment intelligence and opportunities. Credit Partners is part of Morgan Stanley Merchant Banking & Real Estate Investing.

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