Italy’s Equita halfway to target for Fund II

The fund manager has attracted a commitment from the EIF as it seeks to broaden its appeal beyond its home country.

Equita Capital, the Milan-based fund manager, has raised €100 million at the first close of its second fund, Equita Private Debt Fund II. The fund was launched in October last year with a target of €200 million and hard-cap of €250 million.

The first close was supported mainly by Italian investors re-upping from the firm’s first fund, which closed on €100 million in late 2017. These included Fondo Italiano d’Investimento, the Italian fund of funds that was a substantial investor in the debut vehicle.

However, the first close also included the European Investment Fund. This is significant as Equita has the stated aim of reaching out beyond its local base to international investors. It has mandated placement agent Cebile Capital to assist it with this task, which it has said will take priority from now on.

Paolo Pendenza, head of private debt at Equita Capital, told Private Debt Investor that the firm was also looking to broaden its investment activities, and that the second fund would able to invest some of its capital into the DACH region as the first step towards “becoming a multi-geography investor, not just Italian”. He said the firm would like to have more of a presence in the German market in particular by the time it raises its third fund.

Pendenza said a number of international investors only wanted to consider making investments once the first close had been achieved. He also said it was important to deploy capital reasonably quickly to enable investors to make better assessments of Equita’s strategy. More than a quarter of the capital raised so far had been deployed shortly after the first close and – with two deals in the pipeline – that is expected to increase to around half by the end of this month.

Equita Private Debt II has the same investment strategy as the first fund, targeting senior unitranche and subordinated bonds in sponsor-led transactions, with a maturity of five to seven years and a bullet repayment structure. Target returns are also expected to be in line with those for Fund I, which is fully deployed and has an expected gross return of around 9.5 percent.