Patrimonium closes co-investment fund with Credit Suisse

An example of bank/fund collaboration, the vehicle allows the Swiss fund manager to take a slice of loans originated by the financial services giant.

Patrimonium, the Swiss-based asset management company, has closed a co-investment fund with Credit Suisse, Switzerland’s second-largest bank, on CHF165 million ($168 million, €147 million).

The Private Debt Co-Investor Fund I sub-fund has attracted commitments from unnamed pension funds, insurance companies and family offices and was already around 40 percent invested towards the end of 2018.

The fund participates in “first class” loans made by Credit Suisse, with Patrimonium selecting the loans for the fund. A substantial proportion of the loans remain with Credit Suisse.

The annualised net return sought in Swiss francs, after deduction of costs, is CHF LIBOR plus 3.5 to 4.0 percent.

While there has been much talk about competition between banks and debt funds, there have also been those promoting the idea of partnership between the two – with this fund forming one such example.

In a recent interview with PDI, Patrimonium founder and managing director Daniel Heine said the rationale of the fund was “to target a hybrid universe of companies which are still bankable – mainly B and BB rated. They qualify for bank lending, but the banks are typically restricted by the regulators to maximum hold levels on those credits”.

He added: “It’s important for the banks to continue to lend to those businesses and, by having a partner, they can split the exposure.”

He went on to describe the fund as a “very modern product with full alignment of interest between the bank and the fund and proves that the partnerships we have been talking about are really happening”.

A media release from Credit Suisse said that the two firms were planning the launch of a second sub-fund in the second quarter of this year.