Golub Capital Raising $350 Million Mezzanine Fund

Mid-market lender Golub Capital has raised $58.3 million toward a new mezzanine fund, according to a regulatory filing. The first close on GC 2009 Mezzanine Partners, L.P. includes commitments from 75 investors.

The fund has a $350 million target, a source said. The firm invests in senior debt, second lien debt, sub debt, equity co-investments, and its own “unitranche” style of deal which involves a single loan debt financing.

Golub Capital benefitted from a short revival of interest in mezzanine debt in the early days of the credit crunch. From a Buyouts story in Fall 2007:

Prior to the credit crunch, senior lenders aggressively beat subordinated debt providers in speed, rate of closing and flexibility of terms, said Lawrence Golub, president of Golub Capital in New York. “It was a depressing time to be a traditional mezzanine” provider, Golub said. “Especially if you have no leverage, you’re getting whipped on most deals.”

At the time, the firm had placed on hold its plans to go public.

The drought of lenders to the middle market have surely benefitted the firm; in Q1 league tables, Golub Capital tied U.S. Bankcorp at top spot as lead LBO bookrunner, according to Thomson Reuters LPC.

Earlier this year the firm raised $200 million for GC Opportunity Fund II LP, the firm’s secondary strategy. The fund invests in secondary purchases of broadly syndicated first-lien bank loans. In March 2009 it was already 50% invested.