Idinvest eyes senior debt fund close of €500m by June

Investment firm Idinvest Partners plans to raise €500 million for its third senior debt fund, Idinvest Dette Senior III, by June 2015, chairman Christophe Bavière told PDI.

The investment specialist has launched a third fund, as announced today (10 February), after deploying two thirds of the capital raised for its second senior debt fund. Bavière said he expects the remaining capital to be invested by the end of June, necessitating a third fund.

The new fund’s target is roughly €100 million more than was raised for its second senior debt fund, IDS II, which closed on €395 million in July 2014. Idinvest’s first IDS fund raised €281 million in 2013.

Bavière said that the firm may accept some flexibility on the soft-cap of the fund, in the range of €50 to €100 million more than it is currently targeting. The response from its investor base has been very positive, he said.

Deal flow for the second fund came from a much broader investment base than the first fund, Bavière said, with the first slightly over-weight in the French market and the second sourcing deals across Europe.

“The first funds provided financing for some real made-in-Europe success stories, such as Materne’s expansion to the US market or Arena’s international development. I am confident that Idinvest Dette Senior III will deliver a lot more of the same,” Bavière said in a statement.

The fund manager provides senior secured debt to private equity-owned businesses at the smaller end of the mid-market and prefers businesses which will have an international revenue basis. A large part of the second vehicle has been invested in the German market, where Bavière has seen a lot of opportunities recently. He has also noticed a re-opening of the southern European market, he said.

Idinvest partner Eric Gallerne commented: “The Idinvest Dette Senior III fund will invest in the acquisition debt instruments of non-listed European companies with solid fundamentals, that are not ‘distressed’, and that exhibit moderate leverage and a robust business model. The underlying instruments will therefore be non-rated senior loans or bonds.”

The Paris-headquartered fund manager also manages private debt vehicles focused on mezzanine and has a total €1.3 billion of assets under management (AUM) within its private debt business, of roughly €5 billion in AUM overall.

*This article was amended on 11 February to reflect that the fund's target close is by June 2015.