Certior Capital reaches first close of €46m

The firm is targeting €100m for what it says is Finland’s first private credit fund of funds focused mainly on senior and collateralised loans.

Helsinki-based Certior Capital has reached a first close of €46 million for its new private credit fund of funds Certior Credit Opportunities Fund, the firm announced.

Certior Capital garnered commitments from three Finnish institutional investors including Suomi Mutual Life Assurance Company and Seafarer’s Pension Fund, partner Timo Hara, told Private Debt Investor. The firm’s team has also invested in the platform.

Having started preparation for the fund in the latter part of last year, fundraising will continue throughout 2015 towards the target size of €100 million. “The first step post-closing is to widen the reach of fundraising within Finland, but covering other countries is also included in the plans,” Hara said.

Certior Credit Opportunities Fund is Finland’s first private credit fund of funds focused predominantly on senior and collateralised loans, Hara explained. It will focus on direct lending, and growth lending in particular, to small businesses and lower mid-market companies, where traditional lending by banks has been challenging due to regulatory changes since the financial crisis.

The fund will seek to build a diversified portfolio of private credit fund positions mainly through primary commitments, but also potentially via secondary transactions. The fund can also invest directly into private loans and it’s envisaged up to 25 percent of the fund will be invested directly into loans alongside other debt funds. “The direct loan investments are predominantly planned to be done as co-investments, either with the funds we invest in or other funds that we know well,” Hara said.

The three founding partners of Certior Capital, Ari Jauho, Timo Hara and Pasi Pihlajamaa, commented in a statement: “We are happy to experience such a strong support from our first closing investors who have shown notable courage and insight of supporting a new initiative like this. Our team with more than a decade of private credit investment experience is among the most experienced private credit investors in Europe. As such we believe that we are well-equipped to capitalise on the evolving European private credit market that we expect will continue to provide attractive investment opportunities for a long period of time.”

Fund commitments will typically range between €5 and €10 million and co-investments will average around €2 to 5 million, although upper limits may be higher. Net targeted returns are expected to be in the region of 8 to 10 percent and mostly in the form of running cash yield, Hara explained, adding that particularly attractive countries for investment from the fund will be the German speaking countries, the UK, the Benelux countries and to some extent Central and Eastern Europe and Spain.