Northgate raises Mexican mid-market mezz fund

The capital for the new strategy was raised via the listing of shares on the Mexican Stock Exchange, the second such vehicle for Northgate Capital’s Mexican business.

Private equity and venture capital manager Northgate Capital has raised Ps4 billion ($235 million; €210 million) for a new Mexican mezzanine fund. The new firm used Mexico’s CKD structure to raise the capital via the Mexican Stock Exchange. 

The new listed vehicle will provide debt to medium-sized Mexican companies in need of financing for capital expenditure, acquisitions, expansion, debt restructuring or shareholder reorganisation. It is Northgate’s second Mexican CKD vehicle and the firm’s Mexican unit now has more than Ps7 billion in committed capital. 

“This offer will allow Northgate’s investors to access the Mexican middle market, where there is great growth potential, with secured structures that provide an attractive risk-return balance, continuous cash flows, and a predetermined exit date,” said Oscar Alvarado, director and co-head of the new fund.

Alvarado joined Northgate in 2013. He was previously managing partner for Advent International in Mexico from 1996 to 2012. His co-head on the Northgate Mexico funds is Mauricio Del Moral. 

Banorte Ixe was the arranger and joint-bookrunner for the listing, while Morgan Stanley acted as joint-bookrunner. 

Del Moral said: “This new fund will give medium-sized Mexican companies access to an alternative source of financing, which has not been common in Mexico and allows for higher leverage and longer tenors, which enables companies to perform their organic and inorganic expansion plans.”

Northgate Capital is a global private equity and venture capital fund manager focused on local, regional and multi-regional direct and fund-of-funds investments, including mezzanine and quasi-equity investments. The firm has offices in seven countries and more than $5 billion dollars in committed capital, according to its website.