Eurazeo is launching a private debt fund that will be open to retail investors in the second half of 2024.
The French investment group has been heavily active in the private debt space of late, with the asset class now accounting for more than 20 per cent of its assets under management.
Agathe Bubbe, director, wealth solutions within Eurazeo’s investment partners team, told Alternative Credit Investor that the firm has “very strong ambitions for the new fund” which will be less diversified than its last retail offering.
“We launched our first evergreen fund in France, this fund works well and we’re really intent on developing in this sector,” she said. “We’re launching another long-term fund in the private debt space in the second half of 2024.”
Bubbe said that the first fund was a mix of hybrid assets, comprising private debt and secondaries, including equity investments, and attracted a lot of interest throughout Europe and globally.
“We were a pioneer in Europe when we first launched the fund in 2018 and we thought it was very important to have that mix of strategy due to the market environment and diversification,” she added. “However, as Eurazeo grew we now manage more than €7bn of private debt, specialised in the lower mid-market space. We believe that we have enough diversification, deal flow and opportunities, while the current market environment allows us to be confident in launching a new fund.”
Bubbe declined to give a fundraising target for the new fund but noted that the firm’s last private debt programme raised €1bn (£854,000) from private clients across Europe, “despite strong regulatory protectionism previously for retail access to private debt”.
The private debt market has attracted a flurry of capital in recent years, as private equity houses and asset managers tap into the sector in search of yield in a high-interest-rate environment.
This has resulted in intensifying competition for deals, but Bubbe said that Eurazeo is well positioned to take advantage of opportunities in the lower mid-market segment.
“We have a very strong deal flow, complemented by our positioning in the lower mid-market segment, with very strong deployment capabilities, our historic relationships with GPs in Europe and very good relations with companies we’ve financed so far,” she said.
Last November, Eurazeo closed its sixth direct lending fund, raising €2.3bn in capital, surpassing its initial target of €2bn.
The fund raised €900m from retail investors, taking the total scale of the group’s private debt programme to €3.2bn.