Prudential Capital Partners has completed fund raising for its fifth mezzanine fund, Prudential Capital Partners V, L.P., surpassing its target of $1.4 billion. Prudential Capital Partners is the middle-market mezzanine fund business sponsored by Prudential Capital Group, the $78 billion private placement arm of PGIM, Prudential Financial, Inc.’s, global investment management business.
Fund V attracted a diverse set of institutional investors and closed fund raising with 34 investor relationships in reaching its hard cap. More than 70 percent of existing investors re-committed to Fund V, many at higher amounts that brought the capital raise from existing investors to 96 percent of prior fund commitments. Investors in the fund include corporate pension funds, insurance companies, fund-of-funds managers, foundations, and family offices.
In keeping with Fund V’s more global investment orientation, the fund also experienced increased demand from non-U.S. investors, with 28 percent of total commitments coming from outside the United States.
“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,” said Jeffrey Dickson, managing principal of Prudential Capital Partners. “Our team’s continuity and consistent track record across cycles generated substantial demand, which became apparent when we were oversubscribed within five months, reaching our hard cap of $1.825 billion.”
Prudential Capital Partners began offering Fund V, which closed in December, in April 2016 with an initial target of $1.4 billion. With its fifth fund, Prudential Capital Partners has raised more than $5.3 billion from institutional investors since launching its first mezzanine fund in 2001.
Prudential Capital Partners Fund V will follow an investment strategy consistent with its four predecessor funds: making investments ranging from $10 to $100 million to fund acquisitions, recapitalizations, growth capital financings, and management led and sponsored leveraged buyouts for middle-market companies in traditional industries in North America. However, Fund V has expanded capacity to make investments in middle market companies within the U.K. and Western Europe.
“Fund V will have an expanded reach with investments in U.K. and Western Europe based companies,” added Dickson. “Our global sourcing network of 12 regional offices spans North America and Europe, providing clients with an intensely local face-to-face relationship approach to investing.”
For 2016, Prudential Capital Partners completed nearly $260 million of investments across 11 manufacturing, services and distribution companies. It also had realizations for Funds II, III and IV, totaling $265 million.
The investment professionals of Prudential Capital Group will co-invest alongside Fund V in each of its investments using a separate $98 million vehicle.
Prudential Capital Partners, a middle market mezzanine fund business, was founded in 2000. Since then, the firm has raised $5.3 billion in five funds and invested $3.2 billion in 125 companies. In addition to Dickson, other principals of Prudential Capital Partners V, L.P., include Robert Derrick, Mark Hoffmeister, Paul Meiring, Scott Von Fischer, Allen Weaver, and newly added principals Marie Fioramonti and Mathew Douglass. This team has a combined average of 28 years of private investment experience.