Alcentra reaches €2bn for second European fund – exclusive

The London-based investment firm has surpassed its goal of €1.5bn and will aim for a final close by year-end.

At least some investors were not deterred by the prospect of a possible Brexit — Alcentra held another interim close for its European Direct Lending Fund II on Friday (24 June), less than 24 after hours Britain voted to exit the EU, a market source said.

The London-based investment firm, which manages $25 billion, has brought in €2 billion for the fund so far and will hold a final close by year-end, this person said. The interim close means Alcentra has exceeded its initial target of €1.5 billion for the fund. The source declined to specify any hard cap Alcentra might have set and said the European Direct Lending Fund II will focus on senior debt.

The top five sectors Alcentra’s first European Direct Lending Fund invested in were healthcare, business services, waste management, leisure and entertainment, and retail. The European Direct Lending Fund II could lend in some of these areas, the source said, but noted Alcentra planned to shy away from any investments that may be cyclical.

Alcentra declined to comment.

In July 2015, the investment house began marketing the second direct lending fund, as PDI first reported, after its first European Direct Lending Fund held a final close of €850 million in November 2014.

The New Hampshire Retirement System committed $50 million to the first direct lending fund while the Massachusetts Water Resources Authority Retirement Fund put in $5 million, according to PDI Research and Analytics. Hartford Municipal Employees Retirement Fund put in an undisclosed amount.

Other than its London headquarters, Alcentra has offices in New York, Boston, Düsseldorf, Singapore and Hong Kong. The company’s investment strategies include senior loans, high-yield bonds, direct lending, structured credit, distressed debt and multi-strategy. It is owned by The Bank of New York Mellon Corporation.