Loan Note: Tikehau takes to the sky, Muzinich in Asia, Pemberton’s covid-19 play

Tikehau continues to expand its capabilities with an air-focused fund, Muzinich adds senior roles in Asia and Pemberton gets into infection control.

They said it

“You would probably be shocked at how little restructuring activity went on in the second quarter”

Brian Williams, partner at Carl Marks Advisers, warns of a possible rise in default rates during the latter half of the year

First look

Tikehau takes to the skies

Flight club: Tikehau thinks there’s money in the air

Tikehau Capital has just unveiled a €1 billion specialist vehicle focused on the aeronautics sector.

It might seem counterintuitive to be getting involved in air travel at a time when coronavirus laws are causing restrictions on flying globally. However, the France-based asset manager has the backing of some of the biggest names in the sector as well as the French government.

The fund, Ace Aéro Partenaires, has launched with €630 million of commitments. Aeronautics firms Airbus, Safran, Dassault and Thales have jointly committed €200 million. The French government has invested €200 million and Tikehau is providing the balance from its own funds. The vehicle will be managed by Tikehau subsidiary Ace Management.

Muzinich expands further into Asia-Pacific
Muzinich & Co is expanding its presence across Asia-Pacific this year. The New York-headquartered credit manager this month appointed Andrew Tan as head of Asia-Pacific private debt, based in Singapore. He was head of HSBC’s global loans and special situations, Asia-Pacific, where he was responsible for building up the banking group’s private debt business. Tan is joined by Denis Rayel, based in Sydney, who is responsible for the firm’s private debt activities in Australia and New Zealand and who supports the firm’s broader Asia-Pacific strategy.

Read more about it here.

Data snapshot

LPs happy with private debt. Institutional investors were satisfied with their private credit portfolio performance in general, according to new research by bfinance. Compared with a select group of asset classes below, private credit has one of the highest satisfaction ratings in 2020 so far, thus indicating that managers have dealt with short-term issues around the coronavirus fairly well.


Pemberton backs infection prevention business
Pemberton has provided financing for a private equity-backed acquisition in the infection prevention sector. With covid-19 increasing demand for a range of products to prevent the spread of infections, Pemberton felt the company, Vernacare, could realise significant growth.

The deal sees Vernacare, backed by HIG, acquire Frontier Medical’s infection prevention business, which provides a range of sharps and clinical waste disposal solutions to customers in the UK and continental Europe. Pemberton has been backing Vernacare since 2019, when it provided capital to support HIG’s acquisition of the business.

Spotlight on the crisis
Don’t forget to check out our latest podcast, where you can hear Adalla Kim talking to Bruce Tomlinson, head of alternative strategies at Sunsuper, and Bev Durston, founder of Edgehaven, about how this crisis is different from the last and the impact it will have on opportunities for investors in the current cycle.

LP watch

Institution: New Jersey Division of Investment
Headquarters: Trenton, US
AUM: $74.05 billion
Allocation to alternatives: 27.80%

New Jersey Division of Investment plans to boost its target allocation to private debt from 6 percent to 8 percent of its total investment portfolio, according to its July director’s report. As presented during its July investment council meeting, the US public pension believes private debt has an attractive risk-return profile.

The $74.05 billion pension currently allocates 7.30 percent of its investment portfolio to private debt. Alternative investments constitute 27.80 percent of its entire portfolio.

Today’s letter was prepared by John Bakie with Robin Blumenthal and Adalla Kim

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