Babson Capital Europe is approaching the finishing line for its $250 million distressed credit fund, and expects to hold a final close by the end of September.
Dubbed Babson Capital Global Distressed Credit Fund, the fund was launched last October. Since then, Babson’s team has been busy marketing the fund to institutional investors, and has already started investing in European distressed debt opportunities.
“We are investing predominantly across European distressed opportunities,” Stuart Mathieson, co-fund manager and head of European distressed debt at Babson Capital told Private Debt Investor. “We are specifically looking at non-refinanceable companies with over-leveraged balance sheets, who are unable to attain sources of funding from banks.”
Matheison admitted that his expectations in terms of deal flow were low in relative terms, and added that the scale of disposals of distressed corporate loans by banks had probably been over-estimated.
The fund manager is targeting an annual return of 15 percent net of fees.
Matheison also confirmed that the firm will invest $114 million in waste management company Biffa group as part of its debt restructuring.