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Portfolio construction for Golding Private Debt Co-Investment 2021 already underway with two senior secured investments
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Target volume of €200 million enables diversification across 20 to 25 investments
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Conservative investment strategy focuses on direct lending to small and medium-sized enterprises in Europe
Golding Capital Partners has received capital commitments of €75 million at the first closing of its inaugural dedicated co-investment fund in the private credit asset class. Experienced existing investors seized the opportunity offered by the initial fundraising phase to subscribe for Golding Private Debt Co-Investment 2021, which has a target volume of €200 million. The fund gives institutional investors access to a broadly diversified range of conservative direct lending transactions. Golding has been making successful private credit investments since 2017 and will leverage its excellent network and long-term track record, with assets of some €4.6 billion currently under management in this asset class. The fund’s investment focus is on first lien senior lending to small and medium-sized enterprises in Europe. In order to draw down and deploy capital swiftly, two initial investments have already been made and two additional transactions are set to close soon.
Golding Private Debt Co-Investment 2021 gives institutional investors access to the breadth of the European direct lending market. Because in addition to the “double due diligence” carried out by Golding and its partners in the primary funds, investors also benefit from diversification across different management companies, market segments and strategies. The fund is therefore suitable both for experienced investors looking specifically to expand their existing private credit portfolio, and for new investors gaining their first exposure to the asset class. Working alongside specialised fund managers, the fund enables investors to build a diversified, conservative portfolio made up of 20 to 25 individual investments. Its geographic focus is on first lien senior lending transactions in Europe. Preferred borrowers are mid-market European businesses with robust business models in stable sectors such as software/IT, business services and healthcare.
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“Private credit can be a great source of stability in a portfolio, especially in volatile market phases, and a hedge against inflation at the same time – while offering a more attractive return profile than the bond markets.”
One of the recipients of the two loans made to date is a fast-growing software company that offers innovative B2B solutions in the e-commerce sector, and so profits from the structural growth of online purchasing and procurement. The other borrower is a market leader in the roof refurbishment business. Its business model is characterised by stable customer demand and great resilience in a downturn. Two more similarly conservative lending transactions are due to close shortly.
“We are particularly pleased by the sustained interest in private debt co-investment funds from many of our existing investors. In addition to the long-standing expertise and proven due diligence capacity of our specialist team, they also appreciate our strategy, because it offers an attractive alternative to the minimum investment volumes required for co-investments, which are often prohibitively high”, says Dr Matthias Reicherter, Managing Partner and CIO at Golding. “Private credit can be a great source of stability in a portfolio, especially in volatile market phases, and a hedge against inflation at the same time – while offering a more attractive return profile than the bond markets.”
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“The private credit segment and direct lending in particular are still growing quickly, because many banks are continuing to withdraw from the new lending business. The pandemic has exacerbated this secular trend. And in this advantageous situation our investors can benefit from rising interest rates, which we distribute regularly. Given the senior ranking of our funding instruments and the substantial liquidity and equity cushions we require from our selected borrowers, this is therefore a very robust asset class”, adds Jakob Schramm, Partner and Head of Private Credit at Golding.
The fund Golding Private Debt Co-Investment 2021 is structured as a Luxembourg SCS SICAV-FIAR and has a lifetime of eight years. Golding is aiming for a return of at least 7.0 to 8.0 per cent net IRR p.a. and plans to hold a final closing in the second half of 2023.
