Rothschild Merchant Banking arm has completed the final closing of Oberon Credit Investment Fund I, its European secured credit fund.
Rothschild worked with Key Capital to place this unlevered six-year closed end fund.
The Oberon fund is an actively managed credit fund invested in a diversified portfolio of secured debt within leading European LBOs. The fund targets a seven to nine per cent net IRR, via quarterly cash distributions, offering low volatility of returns and access to assets via an investment adviser.
The Oberon portfolio presently consists of c60 per cent 2013 primary issuance, with the balance selected from a pool of seasoned secondary assets well known to the investment adviser. Active management will ensure that relative value will be constantly assessed and the portfolio repositioned to take advantage of attractive market dynamics.
To date the fund is 90 per cent invested across 40 names and is expected to be fully invested in early 2014.
Phil Yeates of Rothschild Merchant Banking says: “We are very pleased to have achieved our initial targets for the Oberon European Credit Investment fund and to have attracted a diverse group of investors from European and UK pension funds, insurance companies, local authorities and family offices. The Oberon strategy marries Rothschild’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 secured debt, notable the predicable levels of cash yield, the floating rate nature of the assets and the relative value European secured credit offer when compared to other sub-investment grade products.”
Rothschild anticipates launching Oberon II in the second quarter of 2014.
