Rothschild closes second Oberon fund on €306m

The private debt manager expects the fund to be fully invested by October.

Rothschild Merchant Banking has held a final close of €306 million on Oberon Credit Investment Fund II, a secured credit fund.

The fund is already 95 percent invested across 53 issuers and the capital should be fully invested by the end of October 2015, the firm said.

Oberon II is an actively managed credit fund invested in a diversified portfolio of mainly senior secured credit within leading European and global leveraged buyouts deals.

The fund targets 6 percent net internal rates of return (IRRs) including quarterly cash distributions.

“We are very pleased with the success of the Oberon II fundraising, which exceeded its fundraising target and attracted a diverse group of investors from European and UK pension funds, insurance companies, local authorities and family offices,” Phil Yeates, co-head of private credit management at Rothschild, said. 

The fund was targeting between €250 million and €300 million and was launched in September last year, PDI understands.

The portfolio of assets at present is comprised of 45 percent primary issuance from 2014 and 2015, with the remainder consisting of seasoned secondary assets.

The firm constantly assesses relative value in the portfolio and can reposition it to take advantage of market dynamics, it said in a statement.

Yeates added: “The Oberon strategy marries Rothschild & Co’s outstanding track record with the attractive risk/reward characteristics available from this asset class.

“There is an increasing awareness amongst investors as to the merits of senior secured debt, notably the predictable levels of cash yield, the floating rate nature of the assets and the relative value European secured credit offers when compared to other sub-investment grade products.”

A team of investment professionals based in London manages the strategy across a series of funds and in managed account form. Rothschild oversees a number of unlevered credit funds, managed accounts and CLO vehicles.

RMB announced this month that it had acquired US-based credit manager West Gate Horizons Advisors, expanding its leveraged loan network. With the purchase, the group now manages private debt funds totalling €3.3 billion.

RMB raised €200 million for Oberon Credit Investment Fund I, closing in January 2014. The private debt group also manages a strategy called Five Arrows Credit Solutions, focused on directly originated mid-market junior debt.