Sources inform ''Globes'' that Poalim Capital Markets - Investment Bank Ltd. has made its first venture into mezzanine investments with a strategic investment in New York-based Praesidian Capital. Bank Hapoalim's (TASE: POLI) private equity unit will invest $20 million in Praesidian's third fund. By law, Poalim Capital Markets can invest up to 20% of the fund's capital.
Praesidian plans to raise more than $300 million for its third fund, which will offer mezzanine loans to mid-sized US companies. Mezzanine funding is interim financing, usually supplementary or as alternative to bank financing. Loans usually involve reduced collateral in exchange for the right to a share in profits.
The Praesidian III fund will have two parallel funds, one with leverage and the other without, and is due to invest in a number of industries.
Praesidian was founded in 2002, and is run by managing partners Jason Drattell, a co-founder of The Blackstone Group's mezzanine fund, and Neil Marks.
Bank Hapoalim CEO and Poalim Capital Markets chairman Yair Seroussi said, "Mezzanine financing has been a major field in private equity in recent years. The idea of investing in mezzanine funds strengthened as a result of the global financial crisis."
Published by Globes [online], Israel business news - www.globes-online.com - on July 14, 2010
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