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Switzerland-based Capvent to launch US mezzanine and expansion capital fund

European fund of funds firm, Capvent, is to launch a US mezzanine and expansion capital fund. The Capvent Current Income Fund will also seek opportunities for co-investment.

'The demand for this type of capital for lower middle market companies is strong in the US due to a shortage of mezzanine and preferred equity capital, decreased leveraged lending from senior bankers and less banks due to consolidation,' said Tom Clausen, a managing partner of Capvent. 'Furthermore, we believe that US mezzanine offers a much better performance profile than European mezzanine.'

'We think that in today's environment such investments provide a better risk-adjusted return and comparable IRR to LBO equity,' added Varun Sood, a managing partner of Capvent. 'It has a low correlation to venture capital and buy-outs and more favourable credit characteristics compared to public high yield.'

Capvent currently manages in excess of $425m and has been investing in private equity since 2000. In addition to managing two discretionary fund of funds, the firm also provides investment advisory services to institutional investors.

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