BlueBay Raises €2B For Second Direct Lending Fund

Dec 1 2015 | 6:32pm ET

European credit specialist BlueBay Asset Management has closed its second direct lending fund after it exceeded the company’s revised €2 billion hard cap. 

Illustrating the intense institutional interest in private debt vehicles, BlueBay completed fundraising for its Direct Lending Fund II SLP in less than a year, according to the company. 

The new fund enjoyed “very strong support” from existing investors, with over 80% of the investors engaged in BlueBay’s previous direct lending fund committing to the new vehicle. It will operate under the auspices of BlueBay’s Private Debt business, headed by Anthony Fobel, which now manages more than €4 billion in various private debt vehicles.

The new fund will provide flexible financing solutions to medium-sized European businesses in order to fill the funding gap left by banks. It will invest in senior secured and selected subordinated loans, with the ability to underwrite large tickets in excess of €200 million.

At closing, the fund was already 25% committed and is enjoying a strong pipeline, reflecting growing demand from mid-market companies for larger, customized financing solutions from alternative lending and private debt specialists, said BlueBay.

“We are continuing to experience a structural shift in the financing markets in Europe away from traditional bank sources with the rapidly growing acceptance of private debt investors as alternative sources of finance to small and medium sized businesses,” noted Fobel in a statement.

"This structural shift has been accompanied by a significant increase in demand for debt finance from businesses, driven by a rapid increase in M&A activity and general recovery across corporate Europe," he added.

Headquartered in London, BlueBay Asset Management is wholly-owned by Royal Bank of Canada, and part of the RBC’s Global Asset Management group of businesses. It managed approximately €56 billion for institutions and high-net worth individuals as of September 2015.

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