LONDON, Oct 3 (Reuters) - BNY Mellon-owned alternative fixed income specialist Alcentra has closed a €690m strategic credit fund, the company announced on Tuesday.
The closed-end Clareant Strategic Credit Fund manages opportunistic investments in loans, bonds and structured credit instruments across Europe, including the UK, France, Germany, Ireland and Italy.
The firm had managed an open-end structure since the launch of the strategy, but the establishment of the closed-end fund structure is part of its wider move towards illiquid investments.
The fund has a three-year investment period and a three-year harvest period.
So far, 40% of the fund has been invested across 16 deals and it is aiming to complete around 30 transactions. The fund is targeting a return in the mid-teens.
Investors to the fund include pension funds, sovereign wealth funds, insurance companies and family offices based in Europe, US, Middle East and Asia.
“We’re not in the classic default cycle, but there is always risk that is mispriced or companies becoming over-levered. Banks in Europe are sitting on around €1.2trn of non-performing assets, so there is significant selling pressure,” David Forbes-Nixon, chairman and chief executive officer of Alcentra, said.
Since the firm established its special situations platform in 2007 it has deployed more than €1.5bn and this latest fundraising brings assets under management for the platform to more than €1bn.
Alcentra is a London-headquartered investment firm that also has offices in New York and Boston. The firm manages a range of debt strategies, including senior loan, high yield, direct lending, structured credit and multi-strategy credit funds. As of June 30, the firm’s total AUM across all strategies stood at US$33bn.
In March, the firm raised €4.3bn on a final close of its second European direct lending fund, which was the triple the amount of the previous strategy. Last month, Vijay Rajguru, a former partner at Golden Tree Asset Management joined Alcentra as a co-chief investment officer, to focus on expanding the firm’s US operations.
Editing by Claire Ruckin