Paribas' merchant banking group has created a new special- purpose investment fund to focus on noninvestment-grade bank loans, high- yield bonds, and private mezzanine debt.
Paribas Capital Funding LLC has an initial capitalization of $750 million, with approximately $250 million of investments. Paribas Merchant Banking Group will be the portfolio manager.
"Paribas continues to expand its capabilities as a provider of capital for leveraged transactions," said Steven Alexander, head of Paribas' merchant banking group. "With the evolution of the distribution market, we wanted to capture the opportunities in asset management that PCF will create."
Eric Green, vice president and portfolio manager for PCF, said the fund will be a total return investor in both primary and secondary markets. "PCF's investment strategy will focus on bank loans with coupons of Libor plus 2% or higher, with the balance being invested in high-yield bonds and private mezzanine debt," Mr. Green said.