BlueBay eyeing first close on Direct Lending Fund II

The London-based asset manager is moving towards a first close on its €1 billion direct lending successor fund.

BlueBay Asset Management should reach first close on its second direct lending fund by the end of the first quarter, according to a source close to the situation. The firm had fully invested its €800 million Direct Lending Fund I by the end of 2014, the source continued.

The London-based firm is targeting €1 billion for the second fund, as reported by Private Debt Investor in January. It is registered in Luxembourg and William Jones, Henry Kelly and Craig Tennier have been named as executive officers on the fund. Anthony Fobel, the firm’s head of direct lending was also named in an SEC filing.

Fund I focused on providing both senior and subordinated debt of between €20 million and €100 million to UK and Northern European companies with an enterprise value under €500 million. The strategy remains the same for the new vehicle, said the source.

The first fund exceeded its €500 million target by €300 million and closed in May 2013. It received commitments from pension funds, insurance companies and family offices, according to a statement at the time, including a €175 million to €350 million commitment from sovereign wealth fund Ireland’s National Pension Reserve Fund.

BlueBay has a unitranche debt partnership with UK lender, Barclays. The bank and debt fund look at opportunities on a deal-by-deal basis and team up to provide unitranche financing. Capital deployed by BlueBay under the partnership came from its first direct lending fund.

BlueBay Asset Management is a wholly-owned subsidiary of Royal Bank of Canada and part of RBC Global Asset Management. The firm manages more than $62.8 billion for institutions and high-net-worth individuals as of the end of 2014, according to its website, and has offices in the US, Luxembourg, Hong Kong and Japan.