Muzinich & Co, an institutional asset manager specialising in corporate credit, has announced first closing of its UK Private Debt fund.
The fund, which is a closed-ended vehicle with a 10-year investment term, has commitments from six institutional investors, including four major UK pension funds.
British Business Bank Investments Limited, the commercial arm of the government-owned British Business Bank, has invested £30m as part of its Investment Programme.
The first fund is targeting £350m in assets and will lend to UK companies with an EBITDA of between £3m and £20m at the time of investment.
Muzinich & Co expanded into the North West of England in October 2015 with the opening of a Manchester office – its eighth office globally – whose primary purpose is to offer growth capital to mid-sized companies located in the UK’s industrial heartland outside London and the South East.
The fund will be run by co-heads Kirsten Bode and Marc Shirman. Bode is based in London and Shirman in Manchester.
“More than 50% of private debt lending opportunities come from outside the South East. The opening of the Manchester office demonstrates our commitment to creating a fund that genuinely targets the whole of the UK,” said Muzinich Managing Director Josh Hughes.
Peter Wilson, CEO of British Business Bank Investments Limited, added: “We made an early commitment to support the development of the fund and are delighted that Muzinich has achieved such a successful first close. Its investment in a team at the heart of the Northern Powerhouse not only fits with our aim of developing new and diverse sources of debt finance for UK small and medium-sized companies but also gives Muzinich an edge in securing attractive lending opportunities beyond the South East.”
Cllr Kieran Quinn, Chair of the Greater Manchester Pension Fund, one of the launch investors, said: “Pension funds have traditionally acquired exposure to fixed interest through traded corporate bond funds. In the current market, private debt funds such as this offer attractive target returns, and the closed-ended structure reduces market risk.
“But of course, in private debt, strong bottom-up credit analysis is essential, and this is an area in which we expect Muzinich to deliver.”
Muzinich Chief Executive and Chairman George Muzinich said: “This is part of a longer term commitment to providing growth financing to middle market companies in Europe. Muzinich has already launched private debt funds in Italy, Spain and France.”