Certior Capital to be catalyst for European SME direct lending with latest fund of funds
Certior Credit Opportunities Fund II has held a first closing with a group of Finnish institutions at EUR 51m. The new vehicle will focus predominantly on the European SME direct lending segment, in particular in seeding emerging managers. It is structured as a Luxembourg special limited partnership to facilitate investment by institutions from across Europe and has a final fundraising target of EUR 300m.
The new fund 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 7 coinvestments across Europe with a bias towards the UK, German-speaking Europe and Spain. The fund is almost fully committed and around 70% invested and is performing in line with expectations. The team at Certior Capital have committed to over 50 private credit primaries, secondaries and coinvestments in the past 20 years and see particular value in smaller transactions in the current market.
Ari Jauho, Chairman of Certior Capital, says more and more institutions are looking at the smaller unsponsored lending opportunity across Europe. “Banks continue to show little interest in lending to European SMEs. While a lot of capital has been raised for direct lending funds targeting a limited pool of larger transactions, SME direct lending funds focusing on EUR 5–25m loans have seen far less fundraising. As a result, SME direct lending still looks very attractive from a risk-adjusted basis. Smaller loans can offer investors a high cash yield, attractive all-in pricing with upside potential, conservative capital structures and lender friendly terms with full covenants”.
“Through seeding experienced country-specific management teams, often in their first institutional funds, we are able to achieve preferential terms as well as coinvestment rights”, adds Mr Jauho. “Overall, we aim to achieve returns of 8–10% net to investors through a diversified pan-European portfolio of 200+ senior secured or asset backed loans”.
The AIFM is SGG Fund Management SA with a full AIMF licence and the depository is SGG Depositary Services SA. Loyens Loeff in Luxembourg is legal advisor to the new fund. Reporting is provided by Assetmetrix GmbH in Munich.
About Certior Capital
Certior Capital is a value-add focused private equity and private credit advisor and alternative investment fund manager supervised by the Finnish FSA. The firm’s core expertise is in European lower- and mid-market private equity and credit markets, where the team’s experience is one of the longest in Europe. In addition to the new fund, Certior Capital currently manages three investment programs: Certior Credit Opportunites Fund invests SME private credit 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.
For further comments or additional information please contact Ari Jauho by email on ari.jauho@certiorcapital.com.
