HarbourVest Partners has reached the final close of its first mezzanine co-investment fund at $375 million, the asset manager said on Thursday.
The Mezzanine Income Fund I closed at its hard-cap and above its original fundraising target of $250 million, according to a company statement.
Limited partners in the fund included pension funds, insurance companies, endowments and family offices across the globe. This includes a $37.3 million commitment from the State of Michigan Retirement Systems, a March pension investment report shows.
Mezzanine Income Fund I invests in secured or unsecured loans, equity and hybrid instruments, according to a meeting agenda for the Palm Beach, Florida public pension.
Peter Lipson, managing director at HarbourVest, said in the statement that the mezzanine debt strategy is “highly complementary to our direct co-investment equity business” especially in “accessing and evaluating deals”.
“What differentiates HarbourVest is our strong equity orientation,” Lipson added. “Our roots in equity allow us to be more agile in terms of how we structure deals. It also better aligns us with the sponsor and makes us a more valued mezzanine partner.”
HarbourVest has been investing in mezzanine since 2003, targeting companies primarily in the US lower mid-market as part of fund of funds or funds with a combined focus on distressed and mezzanine debt.
“Over the last decade we’ve seen consistent growth in the demand from private equity sponsors for mezzanine debt,” Lipson said.
The fund launched in 2014, a US Securities and Exchange Commission filing shows.
HarbourVest is global private investment firm with more than $40 billion in assets under management, according to its statement. The firm provides primary and secondaries, and direct co-investments in commingled funds and separately managed accounts.