First close for HIG Italian distressed fund on €260m

HIG will collaborate with Italy-based IDeA on managing investments in distressed mid-market companies.

HIG Bayside Capital has launched a distressed debt fund alongside IDeA Capital Funds targeting investments in the Italian mid-market.

The firms held a first close on the fund after raising €260 million in commitments from institutional investors as well as the two firms involved.

Duncan Priston, managing director at HIG Bayside, said: “We are extremely pleased to announce this important collaboration with IDeA. We look forward to working together and leveraging our collective skills to identify and invest in attractive mid-market companies.”

The fund, titled IDeA Corporate Credit Recovery, is divided into two strategies: a credit fund and a new money fund. Seven banks – UniCredit, BNL/BNP Paribas, Banca Popolare di Vicenza, MPS, BPM and Biverbanca – have contributed a total of eight loans to the credit strategy, which will be exchanged for units in the fund.

The new money fund strategy consists of providing fresh capital to support the revival of distressed companies operating in the Italian mid-market. Target IRR is 15 percent and industries covered by the fund are retail, manufacturing and chemicals. No target figure has been publicly disclosed.

IDeA chairman Roberto Saviane said: “We will contribute to the new venture with the knowledge and contacts in the financial and industrial Italian sector and will support the relaunch of the portfolio companies with its management and financial skills.”

HIG Bayside is an affiliate of HIG Capital, a Miami-headquartered private equity firm, which has a total of $20 billion assets under management. HIG Bayside manages the firm’s credit strategies, which includes investing in senior and subordinated loans as well as special situations opportunities.

IDeA Capital Funds is predominantly focused on investing in Italian enterprises and holds more than €2.2 billion of assets under management. Established in 2006, it manages four fund of funds, a direct co-investment fund and two sector-focused funds.