Low interest rates and high private debt yields have helped Golding Capital Partners to a €331m first close for its latest fund after just five months.
The firm is more than halfway to its €600m target thanks to the close for Golding Private Debt 2016, which comes two years after its €413m predecessor.
Founder and managing partner Jeremy Golding said, “With interest rates at their current low levels, alternative investments are indispensable for institutional investors.
“High-yield investments in the private debt segment are increasingly an alternative to institutional investors’ traditional fixed income allocation.”
Golding Private Debt 2016 will focus on corporate acquisitions and funding for fast growing mid-market businesses in Europe and the USA.
The firm said this would consist principally of senior loans, but also of subordinated debt such as mezzanine, as well as unitranche debt.
GCP also invests in funds with opportunistic credit strategies in order to stabilise the fund during phases of market uncertainty.
A total of 23 institutional investors subscribed to GCP’s current investment programme at its first closing, including insurance companies, pension funds, banks and savings banks, with 90 per cent of commitments coming from existing investors.
A statement from GCP about the first close said, “Faced with tighter regulation and higher capital requirements, banks only have limited capacities for providing loans to fast-growing companies.
“Privately organised lenders are stepping in to fill the gap left by restrictions on bank lending to medium-sized businesses.
“According to a study by TU Darmstadt, for example, some two thirds of German Mittelstand companies are expecting more onerous funding terms.
“Private debt funds focus precisely on these companies’ needs and provide know-how and advice at the same time.”
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