Loan Note: Tikehau’s new decarbonisation fund; AllianzGI’s three favoured investment areas

Tikehau launches an innovative retail-focused decarbonisation fund; AllianzGI picks three favoured areas within private credit; while MetLife acquires a fund manager. Here's today's brief for our valued subscribers only. 

They said it

“The market will likely and should, in our view, continue to reprice towards higher [rates] for longer”

Peter Williams, director of global policy strategy at investment banking advisory firm Evercore ISI, quoted in the Financial Times

First look

‘Very ambitious’: Tikehau’s latest unit-linked product targets SMEs that want to reduce emissions  (Source: Getty)

Tikehau’s decarbonisation fund reaches out to retail
Alternative asset manager Tikehau Capital has partnered with Societe Generale to launch SG Tikehau Dette Privée, a debt fund that enables private investors to invest in Western European SMEs committed to reducing their greenhouse gas emissions.

Following the announcement, Tikehau deputy CEO Frederic Giovansili told affiliate title New Private Markets: “In France, unit-linked products are a big driver of private investment. Recently, there has been a lot of development in private equity unit-linked products. We are focusing mainly on direct lending, and we see a lot of traction on direct lending as a unit-linked product and adding in the decarbonisation, we’ve made a very unique product for French savers.”

Tikehau did not disclose its fundraising target, but Giovansili said it has “very ambitious goals”. The firm’s first unit-linked product, jointly launched with insurer MACSF in 2021, raised nearly €300 million in 18 months.

The fund, which will be sector-agnostic in its investments, has a maturity of 10 years and an investment period of six years. Every company financed by the fund must commit to a Paris-aligned decarbonisation strategy based on the Science Based Targets initiative methodology. Throughout the financing period, borrowers’ compliance with the decarbonisation plans will be audited annually and, depending on the results, they will “adjust the finance conditions”, the firm said. When it comes to returns, the loans are all floating rate, with a current aim of 5 percent net of management fees.

“In terms of deployment, it is very much similar to what we’re doing for institutional investors,” said Giovansili. “We just added this decarbonisation feature. We believe that this feature that we designed for private investors will be implemented for institutional investors as well.”

Tikehau has classified the fund under Article 8 of the SFDR, opting not to commit to the more onerous obligations of Article 9. Explaining the decision, Vincent Lemaitre, head of ESG for private debt, said: “It’s not a question of the soundness of our methodology, it is more a matter of sustainable data collection. We are targeting SMEs in Europe, and the level of maturity for those companies in terms of sharing data is not that high.”

Private credit one of AllianzGI’s ‘compelling opportunities’
In its outlook for 2023, AllianzGI has named three investment themes that should top investors’ shopping lists this year – with private credit sitting alongside infrastructure and co-investments/GP-led secondaries.

Within private credit, the firm cites three areas of particular focus:

1. European mid-cap lending: Private credit firms once again stand to benefit from the banks’ retreat as they “further withdraw from lending in the deeply non-investment grade space driven by banks’ own increasing cost of capital, and opportunities for banks to earn easier money in safer segments in a higher-rate environment”.

2. Trade finance: Not a mainstream choice in the private debt universe, but described by AllianzGI as “a short-term semi-liquid asset class with limited credit and rate risk, which can be used as a tool to maintain portfolio returns while waiting for longer dated credit markets to reset”.

3. Infrastructure credit: Asia in particular is identified as having “the potential to continue offering value” given its renewables build-out, openness to tailor-made credit solutions and the reshuffling of supply chains generating opportunities across Southeast Asia.


MetLife swoops for Raven
MetLife Investment Management, the asset management arm of financial services giant MetLife, has agreed to acquire Raven Capital Management, a credit manager based in New York and Santa Monica.

Raven specialises in the primary origination, underwriting, execution and management of mid-market direct asset-based investments. It has assets under management of $2.1 billion.

“The addition of Raven Capital Management will broaden and further distinguish our offerings in higher yielding private credit and alternative investments,” said Steven Goulart, president of MIM and executive vice-president and chief investment officer for MetLife.

The acquisition is the second made by MIM over the last year – it also acquired Affirmative Investment Management, a specialist ESG impact manager – in December last year.

Senior sales appointment at Golding
Munich-based fund manager Golding Capital Partners has appointed Wiebke Kuhne as head of its institutional sales team for insurance companies and pension funds. She has worked in sales at Golding since 2012 and succeeds Marco Sedlmayr in the role.

Kuhne, who most recently covered occupational pension funds in Germany, spent 10 years at Unicredit Group prior to joining Golding, where she advised high-net-worth individuals.

In December, Golding made Andreas Breme director of institutional clients, primarily advising insurance companies and sector-specific pension schemes. He previously spent 13 years as an investment consultant at Mercer.

EdR REIM raises €350m for real estate debt
Edmond de Rothschild Real Estate Investment Management, the France-headquartered fund manager, has raised €350 million for its real estate debt platform, having launched in 2020 with a target of €300 million.

The capital raising comprises €170 million for the pan-European High Yield Real Estate Debt Fund I and €180 million for a separate fund on behalf of a German institutional investor.

The fund is currently around 70 percent deployed through six deals in Germany, the Netherlands, France, Italy and the UK. An increase in the cash dividend to investors, from 4.25 percent to 4.50 percent, was recently announced.

The fund is targeting around 8 percent net IRR including a running coupon of 4-5 percent per annum paid out on a quarterly basis. The investment period runs until the end of this year, with about €135 million of remaining capital left to invest across the two fund vehicles.

LP watch

Institution: City of Lakeland Employees’ Pension and Retirement System
Headquarters: Lakeland, US
AUM: $813.6 million
Allocation to private real estate: 8.92%

City of Lakeland Employees’ Pension and Retirement System confirmed its backing of the Mavik Real Estate Special Opportunities Fund in recently released meeting materials.

With a commitment of $11 million made to the real estate credit vehicle, the pension is on course for its 5 percent target allocation to non-core real estate.

Mavik Real Estate Special Opportunities Fund, launched in October 2020, is a subordinated real estate debt vehicle that focuses on financing of the US mid-market. Targeting $300 million in institutional capital commitments, Mavik had raised $200 million for the fund as of September 2022. Performance projections sit at a 21.3 percent gross IRR, alongside 1.5x for MOIC.

The fund portfolio is fully diversified across its sector and regional focus. RESOF operates in the multifamily, mixed-use, retail and office sectors, and looks to plant its flag in assets across the US. By focusing on investment across market types, RESOF looks towards a defensive investment structure that prioritises stability and durable cashflows.

Today’s letter was prepared by Andy Thomson with John Bakie, Christopher Faille and Robin Blumenthal