Prudential Capital Partners Raises $1.8B For Fifth Mezzanine Fund

Jan 12 2017 | 10:45pm ET

Prudential Capital Partners has raised $1.825 billion for its fifth mezzanine fund, easily exceeding its $1.4 billion target and closing at its hard cap.

The new fund, named Prudential Capital Partners V, L.P., was raised in just six months from a total of 34 U.S. and international corporate pension funds, insurance companies, fund-of-funds managers, foundations, and family offices. More than 70 percent of existing investors re-committed to Fund V, Prudential added, and the company’s investment professionals will co-invest in each of the fund’s investments using a separate $98 million vehicle.

The new fund will follow an investment strategy consistent with its four predecessors: 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.

With the fifth fund, Prudential Capital Partners has now raised more than $5.3 billion from institutional investors since launching its first mezzanine fund in 2001.

“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.”

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 statement said. 

Founded in 2000, Prudential Capital Partners is the middle-market mezzanine fund business sponsored by $78 billion Prudential Capital Group, the private placement arm of PGIM, which is in turn Prudential Financial’s global investment management business. The firm has invested $3.2 billion in 125 companies since inception. 

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