Investec Alternative Investment Management (IAIM), a subsidiary of Investec Bank plc, and Carlyle AlpInvest, a global private markets manager, announced the launch of Investec’s European senior debt fund, Investec Senior Debt Fund I (SDF I), a private credit fund with “approximately €400m of investable capital managed by the Investec Direct Lending team.”
SDF I was formed via a credit secondary transaction, led by Carlyle AlpInvest, comprised of “a secondary purchase of high-quality performing loans from Investec’s balance sheet to form a seed portfolio.”
In addition, Carlyle AlpInvest provided “new capital which is available alongside this portfolio to invest in new direct lending investments.”
SDF I is a close-ended, Luxembourg-based special limited partnership focused on providing traditional senior secured loans for European private equity and corporate backed businesses between €3m-€50m EBITDA primarily based in the UK, Ireland, Benelux, and DACH regions.
The strategy is focused on lending to high quality “growth-orientated companies in the lower mid-market – a segment which remains underserved by banks and fund managers.”
It partners with management teams and their financial sponsors “supporting their strategic ambitions, whether organic or inorganic, to drive business growth.”
SDF I is managed by Investec’s Direct Lending team consisting of more than 50 investment professionals all with “experience in growth capital, leveraged finance and direct lending in the UK and Europe.”
The team has more than 15 years’ experience sourcing and managing private debt assets and has invested over “€10 billion in private debt across more than 350 transactions over that period.”
The team has a strong track record of credit selection and “delivering risk adjusted returns combined with de minimus losses.”
The launch of the fund complements the 2021 launch of the €250m Private Debt Fund I (PDF I) – focused on “stretched senior and unitranche direct lending solutions”– and PDF II which is forecast “to have its final close in January, with a target of €500m.”
Investec intends to significantly expand its alternative investment activities across the private credit spectrum “providing investors access to its significant sourcing capabilities.”
In addition to Direct Lending, Investec’s private credit activities “include Fund Solutions, Energy and Infrastructure, Aviation and Real Estate. ”
Investec’s Head of Direct Lending and IAIM, Callum Bell commented that the launch of this senior loan fund “marks an important milestone for our alternatives platform, and they are pleased to have partnered with Carlyle AlpInvest.”
It enables them to showcase the complete “breadth of the team’s sourcing and underwriting capabilities across the European private debt market.”
Carlyle AlpInvest’s Mike Hacker, Partner and Global Head of Portfolio Finance, commented that this transaction highlights the “momentum within Investec’s direct lending franchise and the depth of its relationships with sponsors.”
AlpInvest has a history of partnering with FIs to provide solutions as they “scale and broaden their asset-management capabilities, and this collab with Investec is a natural extension of that strategy.”
Their involvement in establishing SDF I underscores their “commitment to building differentiated partnerships with credit managers.”
They are eager to support Investec as it “expands its senior lending platform and to further strengthen AlpInvest’s position as a partner for private credit managers.”
The transaction was reportedly advised by Ely Place Partners, with legal advice from Travers Smith and K&E representing Investec and Carlyle AlpInvest respectively.