Morgan Stanley has closed fund raising for its first corporate mezzanine fund, Morgan Stanley Credit Partners, with $956m in capital commitments.
The fund, called Morgan Stanley Credit Partners, is part of the bank’s push to expand the merchant-banking activities within its investment-management division.
The fund invests primarily in fixed income securities issued by middle-market companies in conjunction with leveraged buyouts, debt refinancings, acquisitions and recapitalizations.
To date, the fund has invested more than $160m in five portfolio companies and has a target investment size of $20m to $50m.
Morgan Stanley Credit Partners head Hank D’Alessandro said the market for mezzanine debt investing is benefiting from favorable secular trends resulting from an underlying imbalance between the demand for and the supply of capital, particularly for middle market companies.
"We already have a robust investment pipeline in place, and we believe the Fund is well-positioned to continue to benefit from these dynamics," D’Alessandro said.