ESO Capital has held a first close on its sixth fund, PDI can reveal.
The fund has reached 40 percent of the overall target size in commitments.
ESO declined to comment on the amount collected so far or the target. The firm’s previous special situations fund closed on $250 million in November last year.
The first close for Fund VI came from existing and new investors in both the US and UK.
ESO provides transitional capital to small businesses and assets in the UK and Northern and Western Europe.
The firm invested €580 million in over 55 transactions since its inception in 2006. Fund VI will continue with the firm’s strategy to provide capital to support small and medium-sized enterprises (SME) in both growth and restructuring scenarios.
Demand for flexible SME financing continues to outstrip supply despite increasing capital allocations to the strategy, ESO said in statement shared with PDI.
The investment team at ESO is conducting detailed due diligence on three opportunities in the UK and Germany at present, representing €75 million of investment potential for Fund VI. The first investment is due to complete before year-end.
Alex Schmid, founder of ESO, commented: “The SME space in Europe continues to offer attractive investment opportunities today and we expect that to continue for the life of Fund VI. Successful SME investing requires a certain skill set, combined with the battle scars of investing over multiple cycles. ESO is one of the few groups active today who can offer that.”
ESO Capital has offices in London and Zurich. Its two core areas of expertise lie in providing capital to SMEs facing liquidity constraints from high-growth businesses to insolvency situations and acquiring undervalued and distressed / stressed assets.
The firm principally executes investments through originating and structuring loans in-house.