Mezzanine Fund
A mezzanine fund invests in subordinated debt with equity components, often in the form of warrants or options. This hybrid financing structure sits between senior debt and equity in a company’s capital stack. Mezzanine funds are commonly used in private equity transactions to finance buyouts, providing higher returns than traditional debt but with more risk. They offer flexible capital solutions for companies seeking growth capital.
Key Takeaways
- Invests in subordinated debt with equity components.
- Provides higher returns than traditional debt.
- Used in private equity for buyouts and growth capital.
- Offers flexible capital solutions for companies.
