Greyrock Capital Group closed GCG Investors II, a $122 million mezzanine and junior capital investment fund.

The fund will be used to provide debt and equity to finance LBOs, recaps and internal growth needs of companies through investments ranging in size from $5 million to $15 million. Further, the investment manager’s limited partners have an interest in co-investments alongside Greyrock.

Mark Shufro, Greyrock Capital’s managing partner, said that thanks to “commercial banks retreating from small and middle market lending practices,” there is now “an attractive environment for investing in middle market companies” for firms like his.

Recent Greyrock investments include its subordinated debt and equity co-investment in Andrews International’s buy of Garda World Security Corp. Also, the firm backed the purchase by a PE sponsor of ITerpSOFT, a provider of planning software to the healthcare industry.

Lately, private equity and investment managers firms have been getting better receptions from would-be investors as the economy has warmed.

This year, Riverside Partners closed a fund in excess of $400 million. Littlejohn & Co. held an interim close on its fourth fund, late last year, in excess of $615 million. Atlas Holdings filed with the SEC to launch its debut third-party fund, which looks to take in $350 million.

Marlin Management Co. also recently completed fundraising for its third buyout fund, raising a total of $650 billion. And the Audax Group is fundraising for its third mezzanine vehicle, targeting $750 million.

Calls to Greyrock seeking comment were not acknowledged by press time.

Financial services industry