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Certior sets €300m hard cap for Fund II

The Helsinki-based SME direct lending fund of funds manager believes it can continue delivering a net return of around 10%.

Certior Capital, a Helsinki-based fund of funds manager which commits to European SME direct lending funds, is in pre-marketing with investors for its second fund, which has a hard cap of €300 million.

A final close at or near this total would represent a major increase on Certior’s first fund, which closed on €87 million towards the end of last year and which is almost fully committed.

The firm is aiming to raise around €100 million to €150 million within Finland and then the rest from outside the country. It is hoping to complete a first close by the end of this year on around €100 million.

Certior partner and chairman Ari Jauho told PDI the first fund has a target net IRR of 8 to 10 percent, and says he believes it is on course to deliver at the upper end of that range. The return target remains the same for Fund II.

Certior believes SME direct lending to be an undercapitalised area of the European private credit market, with few LPs allocating to the space thus far. The firm has backed the likes of UK-based Beechbrook Capital, Switzerland’s Patrimonium and Spain’s Incus Capital.

Jauho says the firm has typically been investing tickets of around €7-8 million but believes the opportunity is easily scalable and ticket sizes could comfortably rise to around €20 million. The firm does primary and secondary deals plus co-investments.