Oquendo launches €150m senior debt fund

The private debt specialist will look to partner with banks to bridge the funding gap among Spanish mid-market companies.

Oquendo Capital is launching its first senior debt fund, which will target co-investments alongside banks.

The Oquendo Senior Debt vehicle launched in October and has a hard cap of €150 million, with a first close expected to take place before the end of 2018.

Alfonso Erhardt, partner at Oquendo Capital, told PDI: “We’re seeing great traction with LPs who are increasingly looking for lower-returning senior opportunities in private debt.

“Banks also have demand for institutional investors to help them with their syndication, and while this is quite a well-established practice at the larger end of the market it is now happening in the mid-market in Spain.”

The fund will work with banks to provide additional loans to companies in Spain which banks are unable to offer due to regulatory and commercial constraints. It will target Spanish companies with enterprise values of between €50 million and €200 million and EBITDA of between €5 million and €30 million.

Oquendo will also be looking to its LPs to coinvest alongside the fund in providing these loans, bringing total ticket sizes of €5 million up to €25 million.

Erhardt said much of the deal sourcing will come through its bank partnerships, though it also anticipates sourcing deals through other channels such as debt advisory and market relationships.

Oquendo is looking to raise capital primarily from its existing LP relationships but will also seek to establish some new relationships.

Historically, the firm has tended to focus on higher-yielding mezzanine-style debt investments. It has raised three funds to date with its most recent fund closing above target on €200 million in 2017.