PDI annual awards 2018: Europe winners

Europe winners and runners-up of the PDI annual awards 2018.

Lender of the year

1. Ares Management
2. Tikehau Capital
3. Kartesia

Blair Jacobson

Track record and strong origination capacity are often cited as the most important qualities for a successful lender and Ares Management has these in spades. The US-headquartered firm has a decade of experience in the growing European market and says its success is due to its strong local deal sourcing. The firm also has a strong focus on developing sector expertise within its teams to help with efficient due diligence.

“Europe remains a relationship-driven market and we have had an established presence not only in the UK, but also in France, Germany and the Nordics for a decade. Since 2007, we have transacted with almost 100 sponsors and have partnered with 38 of those multiple times,” said Blair Jacobson, partner and co-head of European Credit at Ares.


Senior lender of the year

1. EQT Credit
2. Pemberton
3. Intermediate Capital Group

Paul Johnson

Having raised its Mid-Market Credit II vehicle in 2017, EQT Credit has been busily deploying this capital across Europe. The firm said part of the key to its success as a lender is being able to tap into the wider expertise of the EQT Group and its long history in European private equity.

The firm has a network of industrial specialists to help its fund managers better understand the nuances of each company they perform due diligence on and whether they have the potential to be a market leader and quality credit. Partner Paul Johnson said: “One way we measure success is repeat business from sponsors. We also see some sponsors show an interest in EQT’s Industrial Advisor due diligence due to its quality and level of detail.”


Junior lender of the year

1. Partners Group
2. Park Square Capital
3. Pemberton

Junior debt continues to evolve as private debt becomes more mainstream and managers search for new innovations to help them compete against banks and other fund managers. Zug, Switzerland-headquartered Partners Group has been among the leaders in providing junior financing in Europe, having put a huge $1 billion of second-lien and mezzanine debt to work on the continent in 2018 out of the $6 billion it manages.

The sheer amount it has committed to junior capital makes it one of the most active players in the market and it has completed deals in multiple geographies. One notable deal of the past year is a £285 million ($366 million; €327 million) second-lien facility provided to MRH for its acquisition of Motor Fuel Group. The facility complemented £1.2 billion of senior bank debt.


Lower mid-market lender of the year

1. CVI
2. Kartesia
3. Oquendo Capital

Eastern frontiers: Warsaw, Poland-based CVI

Europe’s lower mid-market is one of the most competitive markets in private debt where established players and new entrants duke it out with banks to tap into the continent’s wealth of small and medium-sized enterprises in desperate need of financing to help fund their growth.

In this highly competitive field, Warsaw-based CVI came out on top this year due to its focus on investing in European private debt’s frontiers in Central and Eastern Europe. To help it chart this underexplored region for private debt, the firm has added six people to its investment team this year and made its first forays into Latvia and Estonia.


Distressed debt investor of the Year

1. LCM Partners 
2. AnaCap Financial Partners
3. SVPGlobal

One emerging theme during 2018 has been the growing expectation that markets are entering a late-cycle period. As a result of this, many firms are looking towards the distressed debt market as an area that could deliver stand out returns in the coming years.

This year’s winner, LCM Partners, has been a long-time investor in distressed debt through its Credit Opportunities series of funds and this year that strategy put €709 million to work across opportunities in Europe. The firm reported that it has beaten its 12 percent unleveraged gross IRR target for the year and managed to draw in €700 million of new commitments from LPs. It expects further opportunities to arise in the near future and has bolstered its presence in several key European markets.


CLO manager of the Year

1. Permira Debt Managers
2. AXA Investment Managers
3. Spire Partners

Sustainability: Permira launched one of the first ethical CLOs

You might not think there’s much scope to innovate with CLOs, but Permira Debt Managers believes you can and this year it has declared the dawn of the “2.0 CLO”. In March, the firm priced its Providus CLO I, which it said is one of the first CLOs in Europe to apply robust environment, social and governance eligibility criteria.

ESG restricts the type of industries the CLO can invest in for ethical or social reasons, such as avoiding companies with a poor record on workers’ rights, or who pollute waterways. The firm also closed another CLO in 2018 and delivered its first equity distribution. To support the 2.0 CLO series, Permira has invested in expanding its team of credit specialists.


Infrastructure debt manager of the Year

1. Macquarie Infrastructure Debt Investment Solutions (MIDIS)
2. Brookfield Asset Management
3. AXA Investment Managers

When it comes to infrastructure debt, Macquarie’s team is among the best in the world and leads the European scene. According to Private Debt Investor’s sister title, Infrastructure Investor, UK-based MIDIS is the biggest fundraiser for infrastructure debt in Europe and third biggest in the world, with over $7 billion of capital raised.

Fundraising has been persistently strong and the firm accumulated $1.2 billion for infrastructure debt in the first 10 months of 2018. It has also looked to innovate and launched a sub-investment grade strategy for LPs that are willing and able to take on that extra level of risk for potentially lucrative returns. The firm also made a reshuffle of its top team in the summer including several new hires.


Real estate debt manager of the Year

1. AXA Investment Managers – Real Assets
2. LaSalle Investment Management
3. DRC Capital

Paris-headquartered AXA bought Quadrant Real Estate Advisors

AXA Investment Managers’ real assets division saw significant fundraising in 2018, adding €1.45 billion of commitments by the end of November. However, it made even bigger strides into becoming a global real estate debt player late in the year with the acquisition of Quadrant Real Estate Advisors.

The deal adds a substantial €8 billion of US real estate loans into AXA’s portfolio and brings in significant expertise in real estate investing. It expanded this European-focused firm into a global player with a huge footprint in North America. The acquisition is expected to increase AXA’s commercial real estate performance by 20-30 basis points. It’s 10th commercial real estate fund is already returning an average of 200 basis points over three-month LIBOR with conservative loans of between 40 and 60 percent of value.


Deal of the Year

1. ET Global (Pemberton)
2. Getronics/Pomeroy (Permira Debt Managers)
3. Motor Fuel Group/MRH (Partners Group)

Succession deal: Pemberton supported Frankfurt-based trade fair services provider ET Global

Pemberton backed German trade fair services provider ET Global in the summer of 2018 to help support the firm through a succession process and to support its growth. Since it began working with Pemberton, ET Global has made two acquisitions to help the business expand. The deal was done without a financial sponsor and the business was able to provide detailed financial information for due diligence.

Mark Hickey, partner and senior portfolio manager at Pemberton Asset Management, said: “ET Global has many of the features we like in a business. It has a diverse client base across a number of industries, it’s a leading company in its market and, because companies typically plan trade show attendance well in advance, it has great revenue visibility which is important for us as a lender.”


Fundraising of the Year

1. Ares Management
2. EQT Credit
3. Incus Capital

Michael Dennis

Ares managed to double its assets under management in Europe last year and says its success is down to its ability to keep up deployment momentum and quickly put investor commitments to work. The firm adds that its track record of producing risk-adjusted returns through the credit cycle is key to ensuring continued investor confidence.

Michael Dennis, partner and co-head of European Credit, said: “We had a high re-up rate from our existing investor base, with many upsizing their commitment significantly. As such, we raised a larger amount of commitments versus our predecessor fund in re-ups alone which generated great momentum during the fundraise. We maintain very close relationships with our investors, treating them as our strategic partners, and in return, we saw their support come through from the early stages of the fundraise.”


Investor of the Year

1. Golding Capital Partners
2. British Business Investments
3. National Employment Savings Trust

Munich-based Golding Capital Partners manages more than €7 billion in alternative assets and has been investing in private debt since 2002. The firm has nearly €3 billion invested in private debt funds and co-investments globally today, making it a heavyweight in the asset class.

Last year, Golding hired Abhik Das from BlueBay Asset Management as the firm’s new head of private debt, a high-profile hire given his previous tenure of nearly six years in BlueBay’s Private Debt Group. Golding further demonstrated its position as one of the largest private debt investors in the German-speaking region following the final close of its most recent fund of funds vehicle at over €580 million in December 2018. The firm also manages a number of managed accounts on behalf of several institutional clients.


Law firm of the Year

1. Ashurst
2. Kirkland & Ellis
3. Paul Hastings

Busy year: City of London-headquartered Ashurst takes its first Europe award

A string of leading private debt fund mandates were recorded by Ashurst in 2018 including the €4.5 billion target ICG Europe Fund VII, the Five Arrows Direct Lending Fund, which closed on its hard-cap of €625 million, and the Shard Credit Partners I Fund, which targets lower mid-market direct lending.

Spearheaded by the likes of Piers Warburton (head of European funds), Nick Goddard (London-based investment funds partner) and Isabelle Lentz (managing partner of the recently launched Luxembourg office), Ashurst delivered a wide range of mandates last year in areas such as fund formation, tax structuring, regulatory issues and co-investment schemes. The firm advised clients including ICG, NM Rothschild, CapMan and Aviva Investors.


Placement agent of the Year

1. Campbell Lutyens
2. Probitas Partners
3. FIRSTavenue

Richard von Gusovius

A longstanding name in the industry, Campbell Lutyens had a fine time of it in 2018 – transacting for 42 clients globally in fund placement and secondaries advisory and racking up $32.5 billion worth of activity. The firm’s $23 billion of fund placement mandates included $3.5 billion in private debt, among them the €870 million close of pan-European GP Kartesia’s Credit Opportunities Fund IV – a fund which hit its hard-cap within nine months of launch.

The firm significantly expanded its international footprint in 2018, opening new offices in Chicago, Los Angeles and Singapore and raising its headcount to more than 140 professionals. “We are seeing an increased interest in European private debt funds from European local pensions and insurers as well as from Asian investors, due to favourable currency dynamics,” Campbell Lutyens partner Richard von Gusovius told PDI.


Specialty finance lender of the Year

1. Incus Capital
2. Wells Fargo Capital Finance
3. Boost&Co

Andrew Newton

The Spanish asset-based lender enjoyed a spectacular fundraising success in 2018, announcing a first and final close of its European Credit Fund III on €500 million. According to the firm, it was not really a formal fundraising at all in the conventional sense. “We went with what people were willing to support without a formal fundraising so the deal team were not interrupted,” Incus managing partner Andrew Newton told PDI. “There was no road show or pitch.”

Newton says the firm has achieved a “mid-teens” rate of return on its two previous funds, which closed on €130 million and €270 million. The firm – which targets areas such as real estate, infrastructure and leasing – has grown from its Madrid roots into offices in Lisbon, Paris and Milan.

Speaking of the outlook for 2019, Newton says: “There are lending strategies that we have been priced out of – not because we cannot compete – but because we feel that the risk adjusted return does not make sense.”


SME lender of the Year

1. Trea Direct Lending
2. BNP Paribas Asset Management
3. CORDET Capital Partners

One of the pioneers of Spanish direct lending, Barcelona-based Trea targets the fledgling sponsorless market – seeing an opportunity to help small companies diversify their funding sources away from the country’s big five banks, which account for around 80 percent of business finance.

According to Trea founder and managing partner Ignacio Diez, the firm’s €70 million first fund, which had a target gross internal rate of return of 8 to 9 percent, was delivering 10 percent in May last year. This was the month in which the firm announced the €50 million first close of its second fund, which was starting to reach out to international LPs as it targeted €150 million in total.