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Capzanine seeks €800m for fourth vehicle – exclusive

The fund is the firm’s fourth direct lending vehicle and is aiming to raise the capital by the second quarter of 2017. Capzanine is also raising capital for a sponsorless mezzanine vehicle and has targeted a final close of €350m.

French asset management firm Capzanine has ambitious plans for its latest private debt fund vehicle, as it aims for an €800 million final close on the fund next year, PDI can reveal.

Titled Capzanine IV Private Debt, the fund’s target is more than double the amount raised for the firm’s previous vehicle. The firm held a final close in 2013 on the third fund raising €350 million, surpassing an initial target of €300 million. PDI understands that the fund is almost fully invested.

Market sources have told PDI that the firm is targeting a first close in September. It focuses on investing in the mezzanine debt of sponsored mezzanine vehicles and targets returns of 9.5 percent gross and 7.5 percent net. Companies with a minimum €10 million EBITDA is the fund’s focus and a final close is due in the second quarter of next year.

Laurent Benard, managing partner at Capzanine, declined to comment further on the details of the fund. He said that France is comparable to the UK in the number of opportunities for private debt investments and the firm’s experience gives it an edge over its competitors. Benard added that the firm provides strong diversification to LPs in search of an attractive risk-reward balance in alternative fixed income strategies.

He said that Capzanine started out by providing mezzanine financing solutions and diversified through the cycle into unitranche and senior loans. This was part of its plan to “develop its product and to adapt to the needs of the market, which is increasingly looking for custom solutions”.

Last month, Capzanine provided the debt financing when private equity firm IK Investment Partners purchased Carlyle Group’s majority stake in orthopaedic implant manufacturer Marle International. The total amount of debt financing was not publicly disclosed.

In addition to the sponsored vehicle, Capzanine is in the market with a non-sponsored mezzanine vehicle, titled Capzanine IV Sponsorless. The fund has a final close target of €350 million, which is expected to take place next year.