Certior Capital holds EUR 100m interim close on Certior Credit Opportunities Fund II with the backing of international investors
HELSINKI – Certior Capital has recently held an interim close on its latest private credit fund, Certior Credit Opportunities Fund II (CCOF II), on EUR 100m. The new vehicle aims to achieve returns of 8-10% net to investors through a diversified pan-European portfolio of 100+ senior or asset backed loans. It will focus on the European SME direct lending segment, in particular through cornerstoning experienced country-specific management teams, often in their first institutional funds. It is expected that 50% of the fund will be deployed in primary investments, generally in such cornerstone situations, while the remaining 50% will be allocated to co-investments and secondary transactions. CCOF II has already made 5 primary, 1 secondary and 7 co-investments and has a number of further deals in due diligence. It is structured as a Luxembourg special limited partnership to facilitate investment by institutions across Europe. A final close is planned for Q1 2020.
The Certior Capital team has committed to over 60 private credit primaries, secondaries and co-investments since 1998. Ari Jauho, the Chairman of Certior Capital, comments that the fund is focusing on what he sees as an undercapitalised and overlooked segment of the market. “Five managers alone have raised over EUR 25bn for larger, sponsored direct lending opportunities in Europe in recent months. As money has poured into this segment we clearly see it becoming less interesting as an investment opportunity. In stark contrast, SME direct lending funds focusing on EUR 5-25m senior loans have received very little capital. As a result, these smaller loans to well-established companies having perhaps EUR 1-5m of EBITDA and EUR 20-50m of sales look very attractive from a risk-adjusted basis. These loans can still offer investors a high cash yield, attractive all-in pricing with upside potential, conservative capital structures and lender friendly terms with full covenants”.
“We have already exceeded the size of our previous fund and have received strong backing from Finnish pension funds and family offices, including a significant number of new investors, and have also raised money from outside Finland for the first time”, he continues. “It is clear that more and more institutions are looking at the smaller unsponsored lending opportunity across Europe and seeing the value it offers in the current market”.
CCOF II follows the same investment strategy as its predecessor, Certior Credit Opportunities Fund, which closed on EUR 87m in October 2016. It has since made 7 primary commitments, 1 secondary and 11 co-investments across Europe with a bias towards the UK, German-speaking Europe and Spain. The fund is fully committed and around 70% invested and is performing in line with expectations.
The AIFM for CCOF II is IQ-EQ Fund Management SA with a full AIFM licence and the depository is IQ-EQ Depository Services SA. Loyens Loeff in Luxembourg is legal adviser to the fund. Reporting is provided by AssetMetrix GmbH in Munich.
About Certior Capital
Certior Capital is a value-add focused private equity and private credit adviser and alternative investment fund manager supervised by the Finnish FSA. The firm’s core expertise is in the European lower- and mid-market private equity and private credit markets, where the team’s experience is one of the longest in Europe. The company’s latest fund, Certior Credit Opportunities Fund II, focuses predominantly on the European SME direct lending segment, in particular in cornerstoning emerging managers. Certior also manages three other investments programs: Certior Credit Opportunities Fund invests in SME direct lending funds and makes investments directly into loans. Certior Credit Investments invests in European mid-market direct lending transactions and Certior Private Equity Fund I focuses on European small- and mid-market private equity opportunities, with an emphasis on backing emerging managers.
For further comments or additional information please contact Ari Jauho.
Tel: +358 50 3378 282