MV Credit has almost fully deployed its €90 million separately managed account focused on senior secured credit, its first foray into lower risk debt, sources told PDI.
The firm formerly known as MezzVest, which rebranded in November, is now preparing to start fundraising for a commingled private debt fund focused on senior debt. The vehicle will target returns of around 7-9 percent and the asset mix will include some unitranche and second lien lines alongside more senior facilities.
A single investor backed the firm’s move into senior debt with a separately managed account totalling around €90 million, as reported. The firm has now deployed around 95 percent of that money, giving it a track record to show investors as it begins raising money from other investors later this year.
The portfolio for the separately managed account includes a higher proportion of lower risk assets than the manager intends to include in the pooled fund with more senior secured debt than higher yielding unitranche assets in the mix, said one of the sources.
The move into senior credit has proved successful for the firm, a long-time subordinated and mezzanine-only house. Being able to take a slice of both the senior and mezzanine debt has opened doors on some deals, the source said.
Some of the assets in the portfolio may be traded and replaced with higher yielding assets but deployment is almost fully complete, the sources added.
The new strategy retains MV Credit’s traditional focus on upper mid-market sponsor-backed borrowers. The firm is working to develop a full private debt investment platform that will allow investors to access the whole capital structure, as PDI reported last year.
The London-based traditionally mezzanine-focused manager, plans to invest from managed accounts, a pooled fund and collateralised loan obligations.
Last February, the firm closed its third co-investment vehicle at €750 million. This fund invests alongside MezzVest III, the firm’s third European mezzanine fund which closed on €585 million in December 2013.