Pemberton has reached the final close on its European mid-market fund after collecting €1.2 billion in commitments.
The Legal & General-backed asset manager has so far invested just under half the fund in 13 deals across the European Union. The firm primarily invests in senior debt.
Seven of the deals completed were in the UK and the portfolio has directed investments to companies operating in the healthcare, hospitality and leisure sectors, among other industries. The portfolio includes both sponsored and non-sponsored corporate transactions.
In total, 27 institutional investors have committed to the fund, including Legal & General, which holds a 40 percent stake in the asset manager, and the Illinois Teachers Retirement System, which placed $50 million with the firm as it switched a portion of capital from its global fixed income portfolio to private debt.
The firm is targeting returns of seven to eight percent and is so far delivering at 7.6 percent. A successor European-focused fund is targeted to launch midway through 2017.
Symon Drake-Brockman, managing partner at Pemberton, said: “When we launched this strategy in 2015, high-quality European companies were struggling to access finance to fuel their growth, traditional lenders were looking for partners to share financing, and investors were seeking long-term sustainable returns in a low yield environment.”
“We believe that the solution was in combining institutional capital with relationship banking, transmitted through a strong risk management and credit underwriting platform.”
It is the first strategy launched by the fund targeting debt investments in the European mid-market. The firm has been making further pushes into other strategies, recently launching its UK-focused fund targeting investments in small and medium-sized businesses. It is eyeing up a final close of £500 million ($620 million; €561 million).
In addition, the firm has made hires, bringing in Ben Gulliver as a portfolio manager from ANZ Bank and Nicole Gates, formerly of GE Capital, as deputy chief credit officer.
For the European fund, Citigroup served as lead placement agent and Arbour Partners worked with UK-based investors in the fund.
James Newsome, managing partner at Arbour Partners, said: “This fund shows the way forward for the European private debt market. Pemberton is simultaneously engaging in partnerships with the banks to source investments and providing an investable fund solution for educated investors.”