Pemberton has posted a first close of its Strategic Credit Opportunities Fund II on €800 million. According to market sources, the first closing took place in March. The firm itself declined to comment.
Launched in mid-January this year, the fund is a successor to the 2017-vintage Strategic Credit Fund. SCF had delivered a gross internal rate of return of 15 percent as of December 2019. SCOF II is aiming for an eventual €1.5 billion to €2 billion final close.
SCOF II is focused on first-lien investments but with an ability to invest across the capital structure. It has already made several investments in the first quarter as it seeks to acquire debt at deep discounts from incomplete syndication processes. It is understood it was able to do deals at around 70-80 cents on the dollar amid the covid-19 outbreak in mid-March.
The firm targets both primary and secondary opportunities and sees an opportunity to provide performing companies with access to debt in challenging market conditions. The strategy caters for temporary liquidity solutions, growth capital for opportunistic acquisitions and buy-and-build strategies.
There is hope in the private debt market that 2020-vintage funds will offer outperformance due to the ability to support good companies through a challenging period, taking advantage of pricing dislocations.
SCOF II is headed by portfolio managers Ben Gulliver and Robin Challis and targets European mid-market companies with EBITDA of between €15 million and €100 million. It has a target return in the high teens.
Based in London, Pemberton has eight offices across Europe. In August last year, it closed its second European mid-market fund on €3.2 billion, beating a €2.5 billion target.