Partners Group has closed a new mezzanine debt fund with €553 million in capital commitments.
On 16 June, Partners Group, the global private markets investment manager, has successfully closed its latest Partners Group European Mezzanine program at EUR 553 million, thereby making it the largest dedicated direct private debt investment program raised by Partners Group 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 program.
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 United States at around 50%. High equity contributions convert into lower risk for mezzanine investors since mezzanine capital ranks higher in the capital structure in case of default.
Partners Group European Mezzanine program recently closed on several new direct investment opportunities in this market environment at attractive terms. This translates into a successful build-up of the portfolio and a positive net performance as of the end of the first quarter of 2010, which is remarkable since private markets investment programs typically experience a J-curve effect.
Since inception, Partners Group European Mezzanine program has invested in the mezzanine facilities of more than 15 companies. Examples for recently closed investments include Springer (a German academic publishing company), Pets at home (an animal product retailer in the United Kingdom) and Ambea (a health care service provider in Scandinavia). As of the end of the first quarter of 2010, the program has invested amongst others in the United Kingdom, Germany, the Netherlands, France and Sweden. In spite of still being in an early stage of its investment phase, Partners Group European Mezzanine program is already well diversified mainly across defensive industries, which include health care, telecommunications, publishing, utilities, electronics, retail, ecological, oil/gas and diverse services.
René Biner, Partner and Head Private Finance at Partners Group, comments, “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.”
About Partners Group
Partners Group is a global private markets investment management firm with over CHF 25 billion in investment programs under management in private equity, private debt, private real estate and private infrastructure. The firm manages a broad range of funds and customized portfolios for an international clientele of institutional investors. Partners Group is headquartered in Zug, Switzerland and has offices in San Francisco, New York, London, Guernsey, Luxembourg, Dubai, Singapore, Beijing, Tokyo and Sydney. The firm employs over 360 people, is listed on the SIX Swiss Exchange (symbol: PGHN) with a market capitalization of over CHF 3.5 billion with a clear majority owned by its 36 Partners and all employees.