PDF
| October 2026Loading content…
Market-rate employee ownership funds that lend subordinated mezzanine debt to ESOP transactions fit best in private credit allocations, according to 11 interviews with asset allocators and advisors. The funds target 10 to 15% net IRR, lend to established companies valued at about 4 to 6x EBITDA, rely on a seller note of 10 to 20% as the first-loss layer, and run as closed-end vehicles with roughly 10-year lockups.
Join The Grid to see all 10 glossary terms
Asset allocators and their advisors get a four-part test (transaction, return, risk, liquidity) for placing ESOP mezzanine debt funds, plus the right benchmark. Managers raising funds for ESOP lending can use it to anticipate allocator questions.
No questions listed yet. Be the first to add a question for this topic.
Suggest questionPeople who have contributed edits to this page.
