Nordic Mezzanine, the Helsinki-based firm, is taking advantage of Europe's increasing interest in mezzanine financing by launching a €200m ($196m) fund.

Vesa Suurmunne, the firm's chief executive, said private equity firms are increasingly turning to mezzanine in their deals. Mezzanine is a form of debt that carries more risk than senior bank lending but includes some element of equity, such as an equity warrant. Dealmakers have increasingly turned to mezzanine as a form of financing and recent difficulties in the high-yield debt market have promoted its importance still further.