The latest fund seeking to capitalise on a growing appetite among investors for mezzanine debt has been raised by Goldman Sachs, reports the Financial Times.

At $1bn, with plans to leverage off a further $500m of debt, the Goldman Sach's Mezzanine Fund II will be the largest fund of its kind. It is likely to invest the $1.5bn in management buy-outs and buy-ins, corporate expansion, public-to-private transactions and balance sheet refinancing through out Europe and North America. The strategy is to work with other financial groups, such as Kohlberg, Kravis & Roberts of the US, rather than try and compete with them for deals.