YIELCO raises €675m for private debt programme

The fund will adopt a highly conservative debt investment strategy focused on European senior credit, the firm says.

Munich-headquartered fund of funds manager YIELCO Investments has raised €675 million for its private debt strategy.

The YIELCO Private Debt multi-manager fund held a final close consisting of €325 million from German and Swiss institutional investors and €350 million private debt mandate. Inurers make up half of the fund’s investor base while pension funds account for 15 percent, 25 percent from occupational pension schemes and 10 percent comes from trusts and family offices.

The fund of funds will adopt a conservative investment strategy to enable risk-averse investors to enter the asset class with a diversified exposure, YIELCO said. The firm will focus on senior secured loans in the lower mid-market with 90 percent of its portfolio aimed at European transactions. It seeks the lowest possible credit risks while also focusing on achieving an illiquidity premium for its investors. It will target a total return target of 5 percent to 7 percent per annum.

YIELCO Private Debt has already made six commitments to target funds and intends to make between nine and 10 total commitments. Approximately 20 percent of the capital has already been called. The fund has a 10-year lifespan with up to two one-year extensions. The fund of funds expects to make all its commitments by the end of 2020.

Dr Matthias Unser, founding partner and managing director of YIELCO Investments, said: “With appropriate selection, interesting managers and strategies with a conservative risk profile can be identified to build and expand investors’ alternative credit portfolios, despite the current challenging market environment.”

YIELCO has been investing in private debt since 2004 and raised its second generation US special situations vehicle in 2019 and its first European special situations fund of funds was raised in 2018. It has €2 billion of private credit assets under management.