BNP Paribas Capital Partners (‘BNPP CP’), BNP Paribas Asset Management’s specialist in external alternative manager selection, announced the final close of its European Special Opportunities Debt Fund (‘ESO’) on 8 April 2020, with commitments totalling EUR 134 million. The ESO investment programme was launched in 2018 to provide institutional investors with exposure to the discounted private debt market in Europe.
ESO is structured as a closed-ended fund of debt funds, with a lifespan of seven years and an average duration of about two and a half years. It aims to offer investors an internal rate of return (‘IRR’) of about 9% to 12%.
Capital is deployed in funds holding corporate debt issued by mid-sized companies that have experienced some difficulties or have been excluded from traditional financing channels. The managers selected by BNPP CP target corporate debt and loans, that are either performing or non-performing and are primarily tier one, within the European financing system. Debt may be bought on the secondary market or from the bank that has held it since it issue.
ESO meets the Solvency Capital Requirements under Solvency II, with a breakdown of each underlying fund’s portfolio available in AMPERE matrix format. Limited partners include European institutions and family offices.
ESO has already completed six commitments out of seven in European funds, representing 90% of ESO total investor capital. By the end of the summer the Fund’s investment programme will be fully complete. Committed funds are invested at around 20%, providing good visibility while maintaining flexibility to capture opportunities in the market. We anticipate the pace of capital deployment to accelerate in the coming months.
Gilles Guerin, CEO of BNP Paribas Capital Partners, comments: The top quality fundraising demonstrates the value and relevance of our concept and allows us to implement this programme. The strategy is being deployed by our specialised investment team, whose members average around 16 years of experience in identifying, selecting and investing in alternative funds.”
Thierry De Rycke and Giuliano Rajabally co-managers of BNP Paribas CP European Special Opportunities Debt Fund adds: The positive way in which investors have greeted our fund is testament to the robust nature of our approach, carefully selecting managers with proven expertise who are highly specialised in of their respective markets in Europe. BNP Paribas CP European Special Opportunities Debt Fund offers investors access to market opportunities that are difficult to capture directly.”
Investments in funds are subject to market fluctuations and to the risks inherent in investing in financial securities. The value of investments and the income they generate may rise as well as fall, and investors may not recover their entire initial investment, the fund described being at risk of capital loss.
BNP Paribas Capital Partners is BNP Paribas Asset Management’s specialist in the selection, multi-management and incubation of alternative managers, including hedge funds, alternative UCITS, private debt, infrastructure and private equity. As at 31 December 2019 BNP Paribas Capital Partners managed, advised and administered EUR 6.5 billion on behalf of institutional clients, corporates, private banks and high net worth individuals.
CEO of BNP Paribas Capital Partners
Gilles Guérin is CEO of BNP Paribas Capital Partners, where he has worked for the past six years developing the alternative investment capabilities of the BNP Paribas...