Park Square Capital has reached a final close of $2.4 billion on its second senior debt focused fund, Credit Opportunities II, the firm said in a statement. The new vehicle is 62 percent invested and ups the firm’s firing power for underwriting to around €250 million with the ability to hold tickets up to around €150 million, Robin Doumar, managing partner at Park Square Capital, explained to PDI.
While the total is in dollars, the vehicle raised sterling and euro-denominated commitments and can deploy capital via all three currencies, Doumar added.
Credit Opportunities II is the firm’s second senior-focused vehicle and will invest into deals in both Europe and the US. Park Square reached a first close of $524 million on the fund in late 2013. It follows the €593 million initial vehicle raised in 2007 and a supplementary fund, PSCP Credit Opportunities B which raised €250 million in 2011, as reported by PDI.
Unlike many other debt funds and direct lenders, Park Square’s senior fund focuses unashamedly on large mid-cap and large-cap leveraged loan deals, Doumar noted. The firm believes that, particularly in Europe, larger leveraged deals offer the best opportunity and Doumar explains that it sets out to form a relationship with its borrowers, many of whom it has been supporting for ten years. With a take and hold position that far outstrips that of many bank lenders which these days try and sell down their whole position, retaining €20 million at most, Doumar says the firm can maintain a friendly relationship with both bank and sponsor partners.
A number of Europe’s private credit providers are making a bid for raising large funds with the ability to commit large tickets to deals. ICG is targeting €3 billion for its second direct lending vehicle which will be able to lend up to €150 million per transaction, chief executive Christophe Evain told PDI in an interview earlier this year.
Park Square’s new fund has a three-year investment period and a seven-year lifetime. Lending to a private equity-backed company is not a requirement for the vehicle but the firm has a clear preference for sponsored transactions and around 90 percent of the deals they do involve a sponsor, Doumar added. The fund has a mandate to invest in both primary and secondary market opportunities.
The new vehicle was supported by a significant number of both European and US-based pension funds, said Doumar.
Park Square Capital Credit Opportunities II attracted commitments from East Riding of Yorkshire County Council Pension Fund, City of San Jose Police & Fire Department Retirement Plan and US-based Greater Rochester Health Fundation, according to PDI Research & Analytics.
Doumar, a Goldman Sachs alumni, founded Park Square in 2004 with partners David Cottam and Michael Small. The firm is headquartered in London. It manages and advises about $4.4 billion of capital and is wholly owned by the investment team.
Park Square invests across the capital structure of leveraged companies, including senior debt, subordinated debt, distressed debt and minority equity positions. It held a first close of €675 million on its third mezzanine fund in February, as reported by PDI.