Five Arrows Direct Lending closes on €655m

The fund is managed by Rothschild Merchant Banking's direct lending division, Rothschild Direct Lending. Most of the fundraising was completed in 2017, Unquote understands.

FADL is complementary to Rothschild Direct Lending's first fund, Five Arrows Credit Solutions (FACS). The high-yielding junior debt fund, closed in May 2014 on €415m, is now fully invested.

Rothschild Merchant Banking has €8bn in assets under management across the entire capital structure, from private equity to private debt. 

Two thirds of investors in FADL are institutional, including insurance companies and pension funds, while the remaining backers are family offices and high-net-worth investors. A spokesperson for Rothschild Merchant Banking confirmed 80% of LPs were European and 20% Asian. The Asian LPs come predominantly from Japan and South Korea. 

FADL provides senior and subordinated debt financing to PE-backed mid-market businesses across Europe. The provided debt financing will be principally in the form of senior secured unitranche facilities.

In addition to supporting private equity sponsors in buyout, expansion and recapitalisation transactions, the fund also provides direct lending to family and entrepreneur-owned businesses with financing needs relating to acquisitions, expansion capital, refinancings and shareholder reorganisations.

Early deployment momentum has been strong and the fund is already more than 40% committed across seven transactions, according to the firm. Investments include BFCC, Arachas, 4Com, Aston Scott, Civica, Magellan and Filiassur.

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