Spanish specialist lender Oquendo is looking to collect €150 million for its third private debt vehicle, PDI can reveal.
The firm has recently begun fundraising for the platform, which has a hard-cap of €200 million.
Oquendo is aiming to complete around 15 deals in the fund. The first incarnation of the vehicle focused primarily on mezzanine investments, but the second and third platforms expanded their offering to other forms of junior debt, including unitranche, PIK loans and preferred and structured equity. The firm is expecting to deploy the capital within a three-year period.
The fund invests in mainly Spanish mid-market companies, but also operates in the Portuguese market. It is sector agnostic. The target IRR of the fund is 15 percent.
Around 60 percent of its investments are with private equity-backed companies and the other 40 percent is direct investments into sponsorless companies.
Alfonso Erhardt, co-founder of the firm, told PDI that it is possible the breakdown might change as around 75 percent of dealflow is coming from sponsorless companies. “These are families that are looking for external capital for growth and require a flexible, non-dilutive source of funds.”
Erhardt added that the strategy of the fund is to be complementary to traditional bank financing, rather than competing. “When the deal becomes too complex or when it requires additional flexibility – that is when we kick in. We’re not trying to replace bank financing.”
Investors in the previous fund include the European Investment Fund, which committed €40 million and Banca March. Erhardt said that the launch of the latest vehicle is a result of existing LP demand, which is made up of 60 percent Spanish investors and 40 percent international firms. He said that he is hoping to increase the number of international investors committing to the fund.
Oquendo’s previous fund attracted €157 million in commitments and is almost fully invested. So far, the fund has completed 13 transactions with two more due to be finalised later this year. Notable deals include Grupo BC, a provider of outsourced mortgage services to financial institutions, and the Comess Group, an owner of restaurant franchises.