Prudential Capital Closes $619 Million Mezzanine Fund; Fund Target Exceeded by More Than 20 percent; Co-Investment Vehicle Established for Senior Staff.

Business Editors

CHICAGO--(BUSINESS WIRE)--July 9, 2001

Prudential Capital Group, a mezzanine fund sponsor and investment management business of The Prudential Insurance Company of America, announced today the final closing of Prudential Capital Partners, L.P., a $619 million mezzanine fund focused on middle-market companies.

"Our investment experience and unique approach to this growing asset class and the current appeal of mezzanine funds helped us exceed our fundraising goal by a flattering margin," says Allen Weaver, senior managing director and co-head of Prudential Capital Group. "We are very pleased with this fund raising effort."

Prudential Capital Partners, L.P., surpassed its initial $500 million target fund size by more than $100 million with commitments from 21 investors. Investors range from pension funds to foreign and domestic money managers, investment banks, individual investors, and Prudential's general account. In addition, the senior investment professionals of Prudential Capital Group have funded a $20 million co-investment vehicle, which will be invested alongside the fund. The mezzanine and co-investment funds are expected to be fully invested within three to four years.

Prudential Capital Partners, L.P., Principal Mark Hoffmeister adds, "Consistent with Prudential Capital Group's investment philosophy for many decades, the fund's strategy is focused on uncovering middle-market companies with strong management teams and stable cash flow."

To date, Prudential Capital Partners, L.P., has funded four mezzanine investments totaling $70 million. The mezzanine fund will make investments ranging from $5 to $40 million to fund acquisitions, buyouts and recapitalizations for middle-market companies in traditional industries.

"Our network of more than 100 investment professionals building direct relationships with issuers on a local basis ensures access to deal flow and allows us to be very selective," says Jeffrey Dickson, principal, Prudential Capital Partners, L.P. "We felt we had a unique and compelling story about our origination capabilities, but it was the response by investors that confirmed it."

Prudential Capital Partners, L.P., is structured as a limited partnership. The principals of the fund are Matthew Chanin, Jeffrey Dickson, Mark Hoffmeister and Allen Weaver. The principals have on average nearly 20 years of private investment experience with specific expertise in mezzanine investments.

Prudential Capital Group, the fund sponsor, has built a strong and exclusive nationwide, middle-market investment capability through its Regional Investment Network with offices in Atlanta, Chicago, Dallas, New York, San Francisco and London; and manages a $31 billion private capital portfolio (as of 12/31/00) of investment grade and below-investment grade private debt, mezzanine and private equity.

The Prudential Insurance Company of America, with more than $371 billion in assets under management as of December 31, 2000, is among the largest financial services institutions in the world, and one of the largest life insurance companies in the United States. Prudential serves millions of individual and institutional customers worldwide and offers a variety of products and services, including life insurance, property and casualty insurance, mutual funds, annuities, pension and retirement related services and administration, asset management, securities brokerage, real estate brokerage franchises and relocation services. Prudential Financial is a service mark of Prudential, Newark, NJ, and its affiliates.