Patrimonium seeks €350m for second debt fund – exclusive

The Swiss alternatives manager likens its debut fund to a taxi and its latest vehicle to a bus.

Patrimonium, an alternative investment manager, has begun talks to raise its second corporate debt fund focusing on larger deals and has cancelled plans for its real estate debt fund, PDI has learned.

The Swiss firm hopes to raise €350 million for Patrimonium Middle Market Debt Fund II, according to Christophe Morize, a director at the firm. The firm will lower its coupon rates for the fund to between 5 percent and 8 percent due to an increase in deal opportunities in this range.

The firm’s debut fund priced deals between 8 percent to 10 percent.

“The first fund is more customised with higher pricing, and the second fund will have more standardised contracts and lower coupons,” Morize said. “We had to start with the taxi, and now we can go down to the bus.”

Patrimonium Middle Market Debt Fund, is a 2012-vintage vehicle that has raised €170 million of its €250 million target, according to PDI data. The firm had invested all of the €170 million as of January and expects the fund to hold a final close by the end of the year, according to Morize.

The firm has cancelled plans to raise its Commercial Real Estate Debt Fund, which it launched last year with a €300 million target, due to “negative market evolution”, and instead plans to focus on raising the complimentary mid-market fund, Morize said.

The firm plans to make between 10 to 40 deals with an average size of €20 million.

Morize said the firm wanted to launch a fund targeting lower coupon rates because it receives around 130 deals annually and has been unable to take advantage many of them because the pricing is too high.

“The Landesbanks, the banks that were traditionally financing these middle-market companies in Germany, are retrenching from the market and we’re just helping these companies to get financing,” he said.

“The more the banks retrench, the larger our segment becomes, and that’s the reason why we can start offering two different pricings.”

On Monday, Patrimonium announced it had formally expanded into private equity through the acquisition of Zurich-based Zurmont Madison’s investment team. Three partners from the firm have joined Patrimonium through a new subsidiary and will continue to manage four assets brought over in a fund restructuring deal backed by Deutsche Bank’s private equity unit.