Tikehau holds EUR 617m final close for European Special Opportunities II

The fund is now more than 50% deployed.

Asked about the fundraising process, Jean Odendall, portfolio manager and fund manager for TSO II, told Unquote: "We started the fundraise towards the end of 2019, but 2020 was really the year in which we raised most of the fund. The first wave of investment was from LPs we already knew, and we started actively marketing in 2020. We had a pause for a couple of months in from February due to Covid, and did trips to see LPs when we could. Everything went to Zoom initially, but it worked well in the end."

TSO II is more than four times larger than its predecessor, the GP said in a statement. Tikehau's debut fund in its Special Opportunities strategy was a 2018-vintage vehicle that raised EUR 150m, according to Unquote Data.

The European Special Opportunities strategy is managed by eight investment professionals.

Investors
"The first fund was mostly family offices and private individuals," Odendall told Unquote. "The second one is the opposite, with more institutional investors, which shows that institutional investors believe in this asset class and trust us to invest in it on their behalf. We are also happy that we have raised capital from the US and Asia – although the majority of LPs are from Europe (not just France but also Italy, Spain, Switzerland and the UK), the LP base is well spread across counties."

TSO II has a 68% re-up rate from existing LPs, Tikehau said in a statement.

Investments
The fund will continue the strategy of its predecessor, targeting corporate and asset-backed deals across primary and secondary credit.

In spite of its larger size, the fund's deployment sweet spot will remain in the EUR 20m-50m region. "The first fund was actually a bit sub-scale for what we are doing," Odendall told Unquote. "Nothing has changed materially in terms of ticket size for TSO II, although we can now make larger deals without co-investors where needed."

TSO II has made around 20 deals to date and has a strong pipeline, Odendall told Unquote. "In high-return debt, the ability to source and see transactions is important," he said, also highlighting the long-term cooperation with Tikehau's head of tactical strategies, Maxime Laurent-Bellue, as a strength of the team.

"We have a big platform behind us in our other strategies, too," Odendall told Unquote. "We have a European mandate and have people in countries including Italy, Spain, Belgium, the Netherlands, Luxembourg, France and Germany – so deals come to us as a firm as a whole, which is a differentiating factor and a competitive advantage, since it broadens the sourcing scope. The pipeline is large, and I would say that it is stronger now than it was pre-Covid."

People
Tikehau Capital – Maxime Laurent-Bellue (head of tactical strategies); Jean Odendall (fund manager, Tikehau Special Opportunities II).

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