Gamma Capital Partners launches mezzanine fund

01 February 2009

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Fund

Gamma capital partners has launched GMP Gamma MezzoPreneurs Fund, an independent evergreen mezzanine fund which is currently in its setup phase. The fund structure is still in evaluation and currently set up in the form of an Austrian limited liability company named GMP Gamma MezzoPreneurs Management & Invest GmbH. GCP is examining the possibility to structure it as a compartment to its established SICAR structure in Luxembourg. The fund rounds off GCP's investment focus and develops a second field in addition to the venture space.

Investors

GMP is currently owned by GIC Gamma Invest Corporation AG, the GCP fund-of-funds set up in early 2008. GIC itself plans to IPO on the stock market in three to five years to open up for cash flow from the public markets. Until the completion of a first closing expected in 2009, GMP cooperates with a domestic bank on a case-by-case financing basis. GMP plans to raise at least EUR100m within the next five years, with no hard cap.

GMP target investors are financial institutions, banks, funds-of-funds as well as private investors. Investors will be offered equity and debt instruments to invest into GMP, minimum tickets will be in the range of EUR50,000.

Investments

The fund utilises an active entrepreneurial strategy to invest in small cap growth mezzanine as well as venture debt in DACH and CEE. Typical investments will be between EUR500,000-5m, with up to EUR10m and more when syndicating the transaction. Enterprise values will be between EUR10-100m, and companies would follow a growth strategy to be profitable in the year the investment is being made. Typical investments could be in the framework of a succession solution, where the mezzanine investment readies the company for the entry of a private equity player, by establishing board and reporting structures in a typically family-owned business or regional champion with strong growth.

The mezzanine fund will invest in both sponsored deals alongside equity investors and sponsorless deals to fund acquisition financing and funded M&A transactions. GMP deals include running and back-ended interest payments as well as equity kickers and targets IRRs of >20% per annum. The fund closed a stealth investment in Fulterer Group in March 2008, providing EUR6m in mezzanine financing, of which half is drawn.

People

Dr Oliver Grabherr, Horst Gaisbauer and Burkhard Feurstein are the main managers of the fund, supported by an investment committee of four. In 2000, Grabherr helped set up Invest Mezzanine at Investkredit AG.

Name: GMP Gamma Mezzopreneurs Fund

Target: EUR100m

Focus: Mezzanine, DACH, CEE

Contact: Dr Oliver Grabherr, Horst Gaisbauer, Burkhard Feurstein

Address: GMP Gamma MezzoPreneurs Management & Invest GmbH

Reisnerstrasse 40/3

A-1030 Vienna

Austria.