NBK Capital Partners has held a first close for NBK Capital Partners Mezzanine Fund II at $110m, driven by strong demand from institutional investors and family offices.

Yaser Moustafa, Senior Managing Director at NBK Capital Partners, said: “We are delighted that NBK Capital Partners Mezzanine Fund II has attracted such high caliber investors in its first closing and believe that it is a testament to the NBK Capital Partners team and its excellent track record.”

“We are excited to have this new capital pool which will be deployed in compelling risk-reward opportunities for our limited partners,” he said.

The firm has declined to comment on the expectations for the final close and the final target.

NBK Capital Partners’ experienced team of investment professionals in Dubai, Istanbul and Kuwait will manage the Fund.

The Fund II’s investment strategy will be focusing on providing capital to middle market companies in consumer-centric sectors such as education, healthcare and food & beverage in the MENA region by way of mezzanine investments.

NBK Capital Partners Mezzanine Fund II will seek to unlock opportunities for investors by focusing on companies that benefit from the long term regional fundamentals of a young and growing population resulting in accelerated household formation and urbanization pointing to favorable demand dynamics.

NBK Capital Partners invests in a broad range of sectors, with a particular focus on: consumer discretionary, consumer staples, education, healthcare, industrials and energy.

The Fund II enjoys a strong pipeline of investment opportunities that should yield its first deployment as early as the second quarter of 2016.

 Amit Sanghvi, Vice President of NBK Capital Partners, said that historically, 40-45% of the deals have been in North Africa (including  Turkey).

 The firm deploys $10m and up to $30m in either conventional or shariah-compliant financing structures in the form of senior,  subordinated, or convertible debt as well as convertible preferred equity.

 “We can do larger deals with our co-investors,” Sanghvi added.

 Sanghvi believes that now is an “excellent time to invest a mezzanine fund because the banks are quite stretched in terms of where  they can invest, whereas there are still companies with opportunities to grow further”.

 “We are seeing high quality companies coming to us for funding, surpassing the deal-flow that we saw during the deployment of our   first mezzanine fund. So we expect similar rates of return but with better credit fundamentals for Fund II. These are very strong,      robust businesses that have been operating for a long time and now need capital the banks cannot provide,” he told Africa Global  Funds.

“We are very far progressed on a transaction which will close shortly in Turkey, this is in the consumer-led sector which will benefit from increased consumption dynamics. We also have another couple of transactions at an advanced stage of negotiation and I expect that we will be deploying the fund very quickly,” he added.

Morgan Lewis represented NBK Capital Partners in the establishment of NBK Capital Partners Mezzanine Fund II, whereas the fund administrator is Maples Fund Services.