BNP Paribas Investment Partners Raises €500M For New SME Debt Fund

Oct 4 2016 | 10:01pm ET

BNP Paribas Investment Partners has held a final close on its BNP Paribas European SME Debt Fund, raising €500 million from a range of leading European institutional investors.  

The fund, announced in August, finances small and medium sized enterprises in Europe through a unique solution combining bank lending and fund financing. It is the latest in a series of European alternative asset vehicles launched this year that focuses on direct lending to small businesses. 

Like most direct lending funds, the new vehicle offers small businesses a senior secured financing solution that combines a medium term bank loan of around five years with a long-term loan provided by the fund of 7-10 years.  Loan origination will mostly be via privileged access to SME debt deal flow provided by the BNP Paribas Group’s European banking network, the company said in a statement. Overall, capital is expected to be deployed across 100-150 transactions.

With a focus on long term financing, the Fund is complementary to traditional bank loans, BNP IP said.  It benefits from European Long Term Investment Fund status, aimed at providing long term financing to unlisted companies, SMEs and infrastructure projects.

“We are very pleased to have completed a successful fundraising, reaching our target level of €500 million at first close,” said David Bouchoucha, Head of Institutional and Laurent Gueunier, Head of Alternative Debt Management, at BNP Paribas Investment Partners. “This confirms the strong interest from investors in an asset class that offers a compelling investment opportunity - SME debt has a low default risk, a high recovery rate and enables investors to diversify their credit portfolios.”

BNP Paribas Investment Partners is the BNP Paribas Group’s asset management specialist. BNP Paribas Investment Partners offers a full range of asset management services to both institutional and private investors around the world and manages assets totaling $532 billion as of 30 June 2016, €280 billion of which is in fixed income.

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