Paris-headquartered alternatives firm Idinvest Partners has closed a senior debt fund on €281 million.
The fund, ‘Idinvest Dette Senior’ will invest in well-positioned European SMEs in their domestic markets which are looking to grow into international markets, the firm said in a statement.
The fund has already deployed almost 20 percent of its capital across eight deals, including French pallet racking and shelving company Averys, which used its debt capital injection from Idinvest to acquire a leading Belgian competitor Stow International. Other deals already completed include chemicals business Novacap and airfield ground lighting business ADB.
It is structured as an FCT (Fond Commun de Titrisation), and targets returns of Euribor +500bps, according to the fund’s private placement memorandum, seen by Private Debt Investor. Its investment period is 18 months, with a possible six month extension, and the fund will mature less than six years after it begins investing.
The fund’s investment team includes partners Francois Lacoste and Jean Plamondon, fund director Eric Gallerne, and investment managers Nicolas Nedelec and Maxime de Roquetter-Buisson.
Management fees are 0.75 percent on deployed capital to €125 million commitments, and 0.65 percent above €125 million. The performance fee is 15 percent on proceeds above Euribor +350 bps.
A minimum of 85 percent of the fund will be invested in senior loans used to fund buyouts or the expansion of private equity-owned businesses, while a maximum of 15 percent can be allocated to unirate loans, convertible bonds and ‘capital’ (used in a restructuring context). The aim is to hold all debt to maturity / redemption, following either the sale of the borrower or refinancing through a new third-party loan. Its semi-active investment approach also allows the fund’s managers to sell debt on the secondary market, or reinvest proceeds from early redemptions.
Idinvest aims to make at least 15 investments with the fund, according to the prospectus.
The firm believes secondary deals are currently an attractive option. “In the current market environment, investing in the secondary market would boost returns thanks to the considerable discounts available on robust and attractive debt instruments,” it said in its fund prospectus. “Added benefits would be to speed up the ramp-up period and diversify the portfolio.”
Idinvest chief executive Christophe Bavière suggested about half the fund’s deals would be on the secondaries when he spoke to Private Debt Investor last month.
The firm, which was founded in 1997 and spun out of Allianz Group in 2010 backed by Idi Groupe, currently has more than €600 million of assets under management within its private debt business, and €3.7 billion across the whole group as of May this year. It manages private equity and venture capital funds as well as several private debt vehicles including mezzanine funds.