Private equity firm Gryphon Investors has closed its first mezzanine fund, Gryphon Mezzanine Partners L.P., with $100 million in capital commitments. The fund received investments primarily from existing limited partners.
Since 2012, the middle market has been seeing a rising popularity in debt funds, particularly CLOs, as a stable investment vehicle for fund managers and investors. Other firms raising debt funds include: Antares Capital closing the firm’s first CLO fund in May with nearly $2.1 billion in backing; GoldPoint Partners LLC raising a fourth mezzanine fund; Littlejohn's Wellfleet closing a $406 million fund; the Carlyle Group (Nasdaq: CG) raising $1.2 billion in capital across two CLO funds this year; and Madison Capital closing its sixth CLO fund in July.
Gryphon Mezzanine Partners represents a new investment strategy for the PE firm, which has raised four control private equity funds in the past. The firm’s latest private equity fund, Gryphon Partners IV (Gryphon IV), received $1.1 billion in capital commitments. The firm’s new fund will invest on a “minority basis in the mezzanine securities of recent and prospective financings of Gryphon 3.5 and Gryphon IV.” Gryphon Mezzanine Partners has committed financing to three of the firm’s portfolio companies, including: Wind River Environmental, Orchid Underwriters, and Ob Hospitalist Group.
“Over the past few years, a number of our limited partners seeking current-yielding investments have asked us about opportunities to participate in the debt financings of Gryphon’s portfolio companies,” states Gryphon founder David Andrews. “This fund is designed primarily to satisfy that LP demand. We are pleased to have run an efficient ‘one and done’ fundraise that reached its cap after only a few months of focus, and we greatly appreciate the enthusiastic and timely support we received from our investors.”
Gryphon is a middle-market private equity firm with approximately $2.6 billion in equity commitments. The firm, based in San Francisco, generally invests between $35 million to $150 million in portfolio companies with approximately $50 million to $500 million in sales. The firm has previously invested in laundry chemical provider Washing Systems LLC and frozen cake maker Original Cakerie.