Certior Credit Opportunities Fund III (CCOF III) has recently held a first close at EUR83 million backed by a group of Finnish, Benelux and Spanish institutions.
The fund aims to achieve 10 per cent-plus net IRR to investors through a diversified pan-European portfolio of 100-plus senior secured loans. CCOF III will focus predominantly on the European SME direct lending segment, benefiting from special terms through seeding experienced country-specific management teams (50 per cent), often in their first or second institutional funds, and through co-investments (50 per cent). CCOF III expects to make several primary commitments to support such managers and execute a number of co-investments before the year end. The fund is targeting to raise EUR 300m from international investors. The new vehicle is following the same investment strategy as its two successful predecessor funds which are both showing net IRRs in excess of 10 per cent with 80 per cent of the capital invested in senior secured loans.
“We are very grateful to investors in the predecessor vehicles, and several new LPs, who strongly supported the new fund at first close,” says Ari Jauho, the Chairman of Certior Capital. “In our previous two funds we showed that we were able to build diversified portfolios of EUR5-25 million sponsorless senior loans and deliver very attractive returns. While massive amounts of capital are chasing larger, PE sponsored deals we continue to see very little institutional money focus on SME direct lending transactions. These smaller loans into profitable businesses can therefore still offer investors a high cash yield, attractive all-in pricing with upside potential, conservative capital structures and lender friendly terms with full covenants – features which we see across our portfolio of around 350 such loans”.
“Since we founded our own business 10 years ago, Certior has very deliberately sought to add extra returns through targeting areas of the European private equity and private credit markets which are undercapitalised and overlooked, through seeding new and emerging managers and by being a preferred co-investment partner”, adds Timo Hara, Co-founder and Partner at the firm. “The predecessor fund, CCOF II, committed to 6 primary funds, 1 secondary and 26 co-investments. With our new fund we are very much continuing this successful strategy”.
The AIFM for CCOF III is IQ-EQ Fund Management SA with a full AIFM licence and the depository is IQ-EQ Depositary Services SA. Certior Capital acts as investment advisor for the fund. Loyens Loeff in Luxembourg is legal advisor to the fund. Reporting is provided by Assetmetrix GmbH in Munich.
