Union Bancaire Privée, UBP SA (UBP) has held the first close of UBP Private Debt Fund III, at over EUR110 million. The strategy seeks to earn attractive risk-adjusted returns by investing in privately sourced debt obligations, expanding UBP’s existing diversified range of private debt solutions.
The Private Debt team originates its transactions from the family office universe, an informal network of multi- and single-family offices and businesses backed by family money. The UBP Private Debt Fund III has a lifespan of 4.5 years and will return capital after a two-year investment period. The target size is up to EUR 300 million, typically invested in debt transactions of EUR5–30 million with one- to three-year maturities.
The portfolio will be skewed towards real estate-related opportunities, with a focus on financing sectors that generate the long-term income streams currently in demand from institutional investors, including social and affordable housing, student housing and the private rental sector. The fund’s investors include HNWIs, family offices, asset managers and institutional investors.
The strategy further complements the investments offered by UBP’s Private Markets Group (PMG), a team that seeks exclusive opportunities for qualified investors in private markets. In 2019, the Bank announced a partnership with independent family group Rothschild & Co, which saw the launch of an equity fund for both private and institutional clients aiming to diversify their portfolios through the private equity market.
Colin Greene, Head of UBP’s Private Debt team, says: “The Covid-19 pandemic has had a dramatic global impact, causing substantial segmental dispersion and accelerating underlying trends. The policy response has driven yields down in public debt markets, encouraging investors to seek private debt strategies. As private debt is not a homogeneous asset class, we will focus on those sectors we see as more resilient to the long-term fallout of Covid-19, including social and affordable housing, the private rental sector and B2B companies.”
Nicolas Faller, Co-CEO Asset Management at UBP, adds: “UBP Private Debt Fund III is differentiated from mainstream private debt strategies by its proprietary origination in the family office universe, and its relatively short 4.5-year final maturity. The solution offers investors access to privately sourced opportunities in this attractive space without tying up capital over an extended period. We are pleased to offer such an innovative and diversified product.”
