Partners Group, the private markets investment manager, has closed its latest European mezzanine programme at EUR553m, making it the largest dedicated direct private debt investment programme raised by the company to date.
Investors including corporate and public pension plans, insurance companies, financial institutions, endowments and high net worth individuals from around the world participate in the programme.
Mezzanine loans offer appealing risk/return characteristics to investors. Interest margins above Euribor are at historically high levels, while the average equity contribution in the first quarter of 2010 remained close to record highs both in Europe and in the US at around 50 per cent. High equity contributions convert into lower risk for mezzanine investors since mezzanine capital ranks higher in the capital structure in case of default.
Since inception, the programme has invested in the mezzanine facilities of more than 15 companies. Examples of recently closed investments include Springer (a German academic publishing company), Pets at Home (an animal product retailer in the UK) and Ambea (a healthcare service provider in Scandinavia).
René Biner, partner and head private finance at Partners Group, says: “The mezzanine asset class held up very well throughout the cycle when compared to other asset classes and proved to be less volatile during the downturn. We are confident with the build-up of the portfolio and the quality of the deal flow that we are currently seeing.”
