Certior holds €100m close for credit fund-of-funds

The fund was originally registered in Luxembourg in June 2018 and held a first close on €51m in August 2018. It will hold a final close by February 2020.

Certior has already made five primary investments, including three cornerstone fund investments backing emerging teams, as well as one secondary and seven co-investments.

Certior's Guy Waller told Unquote that the fund reduces the cost of a "double fee" structure for its investors by acting as a cornerstone investor to emerging managers, which allows it to get better terms. It also generally participates in co-investments on a no-fee, no-carry basis, and benefits from the reduced fees and visibility that secondary investments can provide.

Waller said Certior's focus on managers that target sponsorless deals allows it to access a much wider universe of investment opportunities than the vast majority of European direct lenders that target big-ticket, private-equity-backed businesses, and which are seeing increased levels of competition on the back of major fundraisings.

The vehicle's predecessor, Certior Credit Opportunities Fund I, held a final close on €87m in 2016 and is fully allocated across seven primaries, one secondary and 11 co-investments. It reported a 9.1% net IRR in December 2018, in line with its 8-10% target.

Loyens Loeff acted as legal adviser; reporting is provided by Assetmetrix.

Investors
The fund has, to date, secured commitments from more than 20 LPs, and approximately half are existing investors. The previous vehicle was backed by a range of Finnish institutional investors, including Eläkekassa Verso (Verso Pension Fund), Ilmarinen Mutual Pension Insurance Company, Merimies Eläkekassa (MEK), Tradeka-Invest, and Valion Eläkekassa, according to Unquote Data.

Investments
Certior will target credit opportunities in SMEs across Europe through primary fund investments, secondaries and co-investments. The GP said in a press release that €5-25m senior loans to companies with EBITDA of €1-5m look very attractive on a risk-adjusted basis due to the undercapitalisation of this segment.

People
Certior Capital – Ari Jauho (partner, chairman); Guy Waller (head of business development).

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