Fundraising

RiverRock holds first close on €344m for senior loan fund

The fund hopes to avoid slow origination through a deal with ING Bank.

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RiverRock has raised €344 million for a senior loan fund that will originate loans via ING Bank.

The RiverRock Senior Loan Fund I has been raising capital for the past 12 months and is the manager’s first vehicle to leverage the origination platform of a major European bank.

The fund has attracted commitments from a range of institutional investors in Europe and Asia, including insurance companies and banks, and hopes to reach its hard-cap of €1 billion within the next year.

RiverRock said its strategy, which will only invest in senior loans, has the unique selling point of being highly conservative compared with the large number of unitranche loans currently available in private debt.

It will invest in sponsored and non-sponsored transactions involving companies domiciled in Europe with a typical turnover of €500 million and EBITDA of €100 million. The vehicle is intended to be highly granular and will eventually constitute between 75 and 80 loans. The fund has an eight-year lifespan and a two-year investment period and aims to return Eurbior plus 425-450 basis points.

ING Bank said the deal was part of its focus on “Originate-to-Share”. Its head of wholesale banking, Isabel Fernandez, said: “Partnering up with RiverRock allows us to be more relevant for our borrowing clients, being able to support larger stakes than our own balance sheet or capital positions allows, while at the same time giving investors access to our strong origination activity.”

RiverRock added that deployment challenges facing private debt funds have become an issue for investors.

Inder Bir Singh, partner and head of asset management at RiverRock, explained: “With a wall of capital chasing a limited asset pool, slow deployment of capital has become a real issue for Limited Partners. By entering into an exclusive co-investment relationship with ING Bank, who are consistently a top-five player in the European leveraged loan space, the fund offers excellent visibility of deployment and return of capital.”