Crescent nears mezz fund first close – exclusive

The Los Angeles-based firm expects to hold a first close on its seventh mezzanine fund later this month on roughly half the $3bn target. The US firm also recently closed its first dedicated European fund at its €500m target. 

Crescent Capital Group, a private credit manager, is approaching a first close on its seventh mezzanine fund, according to sources familiar with the firm.

Crescent Mezzanine Partners Fund VII, which launched this summer, expects to have collected about half of its $3 billion goal for a first close later this month, the sources said.  

A Crescent spokesman declined to comment on fundraising. 

The previous fund, Crescent Mezzanine Partners VI, closed on $3.4 billion in August 2013, beating its $2.5 billion target. The strategy provides junior capital to mid-market companies to fund shareholder transitions on behalf of private equity firms. The fund series is focused on sponsor-backed, mid-market companies with EBITDA of $50 million-$150 million. The investments generally take the form of private debt securities with equity interests in connection with buyouts or refinancing, said a Crescent filing with the Securities and Exchange Commission (SEC). Jean-Marc Chapus (pictured), managing director and co-founder at Crescent, oversees the mezzanine strategy.

The firm also runs direct lending strategies and launched fundraising for its first dedicated European fund in the summer of 2014. The Crescent European Specialty Lending Fund, which had collected €400 million by June, has now closed to new money.

The fund finished fundraising at its €500 million target recently. The firm has a total of about €650 million in available capital for the strategy, between the equity raised and some leverage. Christine Vanden Beukel, a London-based managing director, leads the European strategy. The fund has committed about one-third of its capital so far. 

The dedicated European specialty lending strategy looks to capitalize on the dislocation in European credit markets and has the flexibility to invest across the debt capital structure. The vehicle also invests in the primary European leveraged loan and high-yield bond markets. The fund’s primary focus is mid-market European companies with EBITDA of €8 million-€25 million. 

Crescent, which is looking to set up a business development company (BDC), also filed applications with the SEC in November that seek exemptions from various provisions of the Investment Company Act of 1940, which governs BDCs. The filings, which are attached to each one of Crescent’s currently active funds, mainly seek permission to conduct joint transactions using capital from its private funds as well as the BDC, once it’s active. Crescent is setting up a wholly-owned investment advisor called CBDC Advisors to manage investments for the Crescent Capital BDC, according to the filings. 

The Los Angeles-headquartered firm also has offices in Boston, New York and London. It was co-founded by Chapus and Mark Attanasio in 1991. Crescent now has about $17 billion in assets under management. The firm’s strategies were previously branded under the TCW/Crescent name when the firm was owned by TCW between 1995 and 2010.