Ontario's Teachers' Merchant Bank, the private equity arm of the Ontario Teachers' Pension Plan, is to invest $250m in York Street Mezzanine Partners.
York Street Mezzanine Partners will focus on providing mezzanine debt for mid-market private equity firms, but will also have the option of investing in the equity of the companies it finances. Teacher’s Merchant Bank itself will also be able to invest directly in larger deals.
‘Through York Street, we are providing additional financing alternatives to companies and equity sponsors at a time when senior lenders have become more conservative and mezzanine debt is playing an increasingly crucial role in financing both buy-outs and corporate expansion,’ said Jim Leech, senior vice president of Teachers’ Merchant Bank, who believes there is room in the US market for more mezzanine debt financing.
‘We also believe that York Street will be able to provide Teachers’ Merchant Bank with superior returns,’ he added.
Teachers’ Merchant Bank has a portfolio of over C$4bn and has invested in over 100 companies.
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