Prudential beats target for largest mezz fund

The alternative lender affiliate closed its fifth mezzanine fund above its $1.4bn target. 

Prudential Capital Partners has closed its fifth and largest mezzanine fund to date with more than $1.8 billion in commitments, above its original $1.4 billion target, the firm said on Thursday.

The Prudential Capital Partners (PCP) V fund raised capital from 34 investors, including corporate pension funds, insurance companies, fund of funds managers, foundations and family offices, according to a statement.

Jeffrey Dickson, managing principal of Prudential Capital Partners, said in a statement that the fund reached its hard-cap of $1.83 billion and oversubscribed in five months. The company started raising Fund V in April 2016.

“We are very pleased that our middle-market enhanced credit strategy resonated with investors globally, who were seeking yield in a low interest rate environment,” he said.

Among the limited partners that committed capital to the fund were the Minnesota State Board of Investment and the Virginia Retirement System, which contributed $150 million and $100 million, respectively, according to PDI data.

The Minnesota board committed $100 million to Prudential’s previous mezzanine funds, CPC IV, which raised $1.15 billion. The Virginia pension fund is a first-time investor, PDI data showed.

Dickson added that Fund V will expand its investment capacity to UK and Western Europe companies. The firm’s four previous mezzanine funds focused on mid-market companies in North America only.

The firm was not immediately available to comment further.

Across its five mezzanine funds, Prudential Capital Partners has raised more than $5.3 billion from institutional investors since launching its first fund in 2001, according to the statement.

The fourth fund had raised $1.1 billion in commitments by January 2013, according to US Securities and Exchange Commission filings.

Prudential Capital Partners finances acquisitions, recapitalisations, growth capital financings, and buyouts for mid-market companies globally with $10 million to $100 million investments, the company said.

The firm is the mezzanine business of Prudential Capital Group (an affiliate of financial giant PGIM) that manages nearly $78 billion, as of 30 September, private debt, mezzanine and private equity, according to its website.