Springrowth SGR, a wholly-owned subsidiary of Muzinich & Co Ltd, has held the first close of the Diversified Enterprises Credit Fund (DECF), the first parallel lending vehicle to be launched in Italy.
The DECF, which is a closed-ended vehicle with an eight-year investment term, has received EUR210 million in commitments from a broad group of Italian and international institutional investors. The European Investment Fund (EIF) and the Cassa Depositi e Prestiti (CDP) acted as anchor investors in this initiative to bring capital market funding to Italian SMEs in parallel with the banking sector.
Gianluca Oricchio, Springrowth CEO, says: “Through this strategy we will engage as a primary participant in middle-market bank loans, acting as a parallel lender alongside Italian banks, to enable the creation of a highly diversified portfolio of loans. This approach serves a different purpose to traditional private debt funds, which contain concentrated portfolios of independently-arranged debt securities.”
“Muzinich fully shares these objectives,” says Filomena Cocco, Managing Director at Muzinich, who led the acquisition of Springrowth. “Through the DECF, we intend to implement an innovative, scalable model of cooperation with Italian banks. Since 2014, Muzinich has focused on the growth segment of the middle-market, which is underserved by market participants. In Italy, this segment constitutes the backbone of the economy and is still predominantly serviced by banks. We believe that partnering with banks is essential to access broad deal flow and enable steady capital deployment.”
“We are now ready to start our investment activity in the Italian middle-market space,” says Massimo Di Carlo, Springrowth Founder and Senior Advisor to Muzinich. “We will provide customised, long-term financing that will help our clients grow and strengthen their balance sheets in cooperation with our partner banks who will retain their relationships through their wider product offering.”
“The Diversified Enterprises Credit Fund is a further example of our commitment both to the Italian market and to the country’s middle-market companies,” says George Muzinich, CEO of Muzinich and Co, Inc.
