Kayne Anderson Targets $500 Million for Mezz Fund

Kayne Anderson Capital Advisors this week held a $110 million second close on its debut mezzanine fund, which is being raised with a $500 million target. A source tells peHUB that the firm expects to hold a final close sometime in 2010, with Guggenheim Partners serving as placement agent.

I didn’t previously know that Kayne Anderson even had a mezzanine group, but apparently it was formed late last year, when Richard Kayne pulled Ed Cerny and Dave Petrucco out of The Blackstone Group. The pair had been managing directors on Blackstone’s mezzanine funds, but saw their roles diminished after Blackstone’s acquisition of GSO Capital Partners. Once Blackstone formally decided against raising a third mezz fund, it was time to jump.

Kayne Anderson is primarily known as an energy-focused private equity firm, but the mezzanine group is sector-agnostic. It’s first two deals, for example, were for career outplacement services provider Drake Beam Morin (sponsored by Compass Partners) and canned tunafish maker Bumble Bee Seafoods (sponsored by Centre Partners).

There is no right of first refusal agreement between Kayne Anderson’s private equity and mezzanine groups.