US investor Merced opens London office

The newly named alternative investment house Merced Capital, previously EBF & Associates, has opened an office in London, in anticipation of opportunities arising in the European market.

As a result of continued dislocation, “we think we can find a number of opportunities,” Andy Platt, managing director at Merced, told Private Debt Investor.

Platt, who has relocated from the US and will head up the new London office, explained that the firm was here to provide capital to certain sectors that have fallen out of favour. “We don’t think things are tremendously cheap in Europe… It’s more a strategic expansion for us,” he said.

Platt explained that Merced, which changed its name in order to align the name of the management company with the names of its private funds, specialises in providing capital to niche alternative sectors.

The firm closed its Merced IV fund at $800 million late last year. The fund is now 40 percent invested. Merced puts half of its investment in financial assets, like private debt, and the other 50 percent in real estate and other hard assets like ships and equipment.

US real estate is the largest sector from which capital has been deployed from the current fund, primarily in joint venture investments, through a combination of equity and debt to small-to-medium size homebuilders, Platt explained. “We’re looking to expand that model into Europe,” Platt said.

Typical investments have a life-cycle of between two to three years and are around $10 million to $50 million in size, though Merced has also made investments outside of this range.

Headquartered in Minneapolis, Minnesota, Merced has $2.2 billion in assets under management. The firm was founded in 1988 as a spin-out from Cargill, a subsidiary of one of the world’s largest private agricultural companies.