Equita Capital launches €200m debt fund

Alessia Argentieri
20 September 2019

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Equita Capital has launched Equita Private Debt II (EPD II), a new private debt fund with a €200m target to provide financing for buyouts of medium-sized Italian companies.

The fund will be larger than its predecessor, EPD I, a €100m vehicle that closed in September 2017 and is now fully deployed, with a year-to-date return of 9.5%.

EPD II expects to hold a first close on €60-100m by the end of the year and hold a final close by the end of 2020.

The fund, which aims to deliver an IRR of around 10%, will be managed by Equita head of private debt Paolo Pendenza.

Cebile Capital is acting as placement agent for the fundraise.

Investors
The GP expects most of the investors from its previous fund to re-up, including several Italian pension funds, banks, life insurance companies, foundations, family offices and CDP-backed Fondo Italiano d'Investimento. Equita also plans to raise commitments from numerous new LPs, including European funds-of-funds and asset managers.

Investments
EPD II will deploy tickets in the €10-15m range in Italian companies generating EBITDA of at least €4m and revenues of €20-200m. It will provide unitranche and subordinated debt in small to medium-sized buyout transactions led by private equity funds.

The aggregate leverage, including both the financing provided by the fund and senior bank debt, will be on average 3.2x EBITDA.

The fund will have a generalist approach, investing in a wide range of sectors, except for real estate and financial services, and will dedicate a special focus to ESG investing.

EPD II expects to close its first two deals by the end of this year in the food, beverage and retail sectors.