Tikehau Capital readies deployment of third special opps fund with bigger deals in sight

Pablo Mayo Cerqueiro
15 September 2022

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Tikehau Capital plans to start investing through its new special opportunities fund in the coming quarter, just a year after the close of the strategy’s previous vintage, a source familiar with the situation said.

Tikehau Special Opportunities (TSO) III was established in Luxembourg in late July, according to the local business register. The Paris-listed group mentioned in its interim results at the time that it was expediting the launch to capitalise on market opportunities.

Fundraising for the vehicle will likely spread across H1 2023, the source said. It is expected to surpass the volume of its predecessor, the source added, without providing a target.

Tikehau announced the final close of TSO II in summer 2021 at EUR 617m, exceeding its initial fundraising goal by 25%. This was more than 4x the amount secured for the strategy's debut vehicle.

The launch of the new vintage follows "active deployment" by TSO II since the beginning of 2022, on the back of increased volatility in European credit markets, the source indicated.

"Fund II is close to being fully invested, and the opportunity is set to expand further in the coming months with the energy crisis, broader inflation and rate environment as key catalysts," the source added.

At the time of its final close, TSO II had already deployed more than half its commitments due to an uptick in activity on the heels of the COVID-19 pandemic.

The strategy for TSO III will remain "fully in line" with the first two vintages, the source said. However, "ticket sizes might increase as the franchise is growing and has more capabilities," the source noted.

"The fund is positioned as an all-weather capital solution mandate, deploying mainly in Western Europe across public and private opportunities," the source added.

Managed by its Tactical Strategies team, Tikehau's special opportunities strategy offers capital solutions across Europe's primary and secondary credit markets, including rescue corporate and asset-backed loans, as well as bespoke capital arrangements for companies with limited access to traditional financing options, as per a press release.

Tikehau declined to comment.