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Metric closes in on three more private debt deals

Having made two investments earlier this month, private debt fund manager Metric Capital Partners is preparing to close a trio of deals as appetite for new sources of capital grows.

It’s been a busy first year for Metric Capital Partners. The private debt fund manager, launched by former UBS and Towerbrook executive John Sinik last year, has hit a first close for its maiden fund, agreed three deals, and is poised to sign three more.

“The macro dislocation in Europe is creating an opportunity to inject flexible capital into healthy mid-sized companies, in a way which can deliver outsized returns despite the strong downside protection approach we apply to every transaction,” explained Metric partner and co-founder Giovanni Miele.

That dislocation saw MCP back LM Funerals in March when Duke Street Capital acquired the UK-based business – the buyout firm’s first deal since switching to a deal-by-deal funding model.

This month, MCP completed two further investments, in childcare provider Kedleston UK and in hotel group TVHG. Both deals involved bespoke credit instruments structured to provide the security of debt, with return characteristics more commonly associated with equity. They highlight the firm’s tailored approach to investing, that also involves active ownership.

“Although our investments tend to be through credit instruments: we are very focused on creating upside potential through equity exposure which is typically stapled to our investments,” Miele explained. “We also put a lot of focus on the development and governance of our portfolio companies as we typically have board representation on each of our investments.

“Management teams and shareholders we partner with typically see us as a valid alternative to the traditional private equity model – as we provide not only flexible capital, but also experience and expertise in a way that better optimizes everyone’s objectives,” Miele explained.

The firm’s three forthcoming deals are all non-private equity-related, Miele added.

In tandem with dealmaking, MCP’s team has also been busy raising its inaugural fund. The fund has a target of €300 million and held a first close in March on about €100 million, sources said. Miele declined to comment on the fundraising.