Kreos Capital is moving towards a final close on its fifth fund in mid-January which should exceed its €240 million predecessor, PDI understands.
London-based Kreos is a growth lender providing covenant-free financing of up to €30 million to fast-growing sponsor-backed borrowers. The firm targets net IRR of around 15 percent with the strategy which builds equity upside into the firm’s loans.
The firm declined to comment on fundraising.
Fund IV closed on €240 million in September 2013. Kreos is able to recycle capital over the fund’s lifetime which increased the firepower of the fourth fund to around €600 million, as reported.
The firm focuses monthly cash amortisation and senior security to eliminate deal risk. When targeting deals, the firm tries to position itself as sole lender in order to have full control of its senior secured position.
“We are very focused on amortisation, cash coupon, we don’t do PIK [payment-in-kind] or balloon structures. We don’t make money from financial engineering,” general partner Ross Alhgren told PDI this year.
Kreos is also led by general partners Maurizio Petit Bon, Raoul Stein, Marten Vading, Luca Colciago and Simon Hirtzel, who is also chief operating officer.
It lends to high-growth companies with revenues of up to €150 million. It was founded in 1998 and has completed nearly 400 transactions and committed €1.4 billion in 14 different countries, according to the firm’s website.
Additional reporting by Anna Devine.