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Carlyle closes debut mezzanine fund at $436m

The Washington, DC-based firm has closed its first mezzanine fund after making eight initial investments.

The Carlyle Group has closed the first fund to come out of its new mezzanine arm, Carlyle Mezzanine Partners, at $436 million.

The mezzanine arm was established in 2004 and is co-headed by managing directors Leo Helmers, Rufus Rivers and James Shevlet Jr. Based in Los Angeles and New York, the group will be investing in companies undergoing leveraged buyouts, recapitalizations and growth financings led by other private equity firms, focusing on senior subordinated notes with warrants, preferred stock and minority common equity securities.

The closing comes just two days after The Blackstone Group closed its second mezzanine fund, Blackstone Mezzanine Partners II, at $1.06 billion.

According to public filings, the fund was launched with a target of $400 million, and held an interim close last April on more than $170 million.

“We are pleased to have exceeded our fundraising target and appreciate the confidence of our investors,” said Rivers in a statement. “With credit markets becoming increasingly unpredictable in 2006, we’re seeing more mezzanine investment opportunities and are well positioned to take advantage of this trend.”

The mezzanine team has already invested in eight companies: Sanitors, a janitorial provider; Combined Systems, an anti-riot munitions producer; United Road Towing, an automobile towing and auction company; LPL Holdings, an investment advisor; Sharis Management Corporation, a restaurant operator; Targus Group International, a producer of computer carrying cases; American Achievement Corporation, a yearbook and class ring provider; and Comark Building Systems, a manufacturer of modular buildings.

Other mezzanine funds that have closed this year include Babson Capital management’s Tower Square Capital Partners II at $1 billion, Harbert Mezzanine Partners II at $233 million and York Street Mezzanine Partners II at $700 million.