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EBRD earmarks €100m for mezz funds

The European development finance institution has committed to funds from two Central European mezzanine specialists: Mezzanine Management and Syntaxis. It has also approved a €20m commitment to a special situations fund.

The European Bank for Reconstruction and Development (EBRD) has approved commitments totalling €100 million for Central and Eastern Europe-focused mezzanine funds.

The development finance institution has given board approval for a €50 million commitment to the second vehicle from mezzanine specialist Syntaxis, a spin out from pan-European mezzanine provider MML Capital. Syntaxis Mezzanine Fund II is targeting €250 million with a hard cap of €350 million.

Central Europe: businesses still need finance

The EBRD has committed a further €50 million to Accession Mezzanine Capital III, a fund managed by Mezzanine Management Central Europe, an affiliate of MML Capital. The fund has a target size of €350 million and a hard cap of €400 million.

Both funds will make mezzanine investments in mid-market companies in Central European and Balkan nations as well as select investments in Russia, Ukraine and Turkey.

While buyout activity has slowed considerably due to the lack of senior debt available, mezzanine providers believe that the credit freeze will result in opportunities for those still able to lend. “Good businesses in our region will continue to need finance, for expansion and for acquisitions,” said Syntaxis managing partner Ben Edwards.

The EBRD has also agreed a €20 million commitment to US-headquartered turnaround specialist CRG Capital. From its European base in Austria the CRG Capital CEE Special Situations Fund will make investments in equity and non-performing debt instruments, as well as secondary fund interests.

The EBRD, which is mandated to build market economies in countries from Central Europe to Central Asia, is also considering commitments to private equity fund of funds Alpha CIS Opportunity, which is targeting $300 million, and 3TS CEE Fund III, a fund affiliated with global private equity firm 3i, which is targeting €200 million.