American Banker/Bond Buyer Hibernia Corp. has just been granted approval by the Office of the Comptroller of the Currency to establish a de novo operating subsidiary to raise funds to invest in companies.

The new entity, called Hibernia ACP, LLC., is structured as a general partnership and has a goal of raising $20 million from corporations and wealthy individuals to invest in mezzanine debt, according to a company spokesman. The companies to be invested in will be located in the Gulf-area states, especially Louisiana, home base of Hibernia.

While commercial banks are not strangers to these types of funds, they have largely been the domain of investment banks. Nevertheless, the fund represents an opportunity for Hibernia to start up a new business and please its existing clients at the same time.

"Here’s an opportunity to stay with that (existing client company) that may be looking to go public at some point. It provides "angel" funding for a company with maybe $10 million in sales. They tend to be operating companies–not start ups–that need some capital to grow," said R. Harold Schroeder, an analyst and Keefe, Bruyette & Woods Inc. He added that the fund also provides the bank’s corporate and wealthy individual investor clients with another investment opportunity.

"First Commerce, which was Hibernia’s competitor across the street, had a fund like this before Hibernia bought it," Schroeder said. o J.H. & E.W.