Oquendo Capital launches €250m fourth mezzanine fund

The vehicle expects to hold a first close by the end of the year and a final close by mid-2020. It intends to generate gross IRR of around 15%.

Oquendo Mezzanine IV will follow the same strategy as its predecessor, Oquendo Mezzanine III, which held a final close on its €200m hard-cap in October 2017 and is now around 90% deployed.

The firm launched a senior debt vehicle in January 2019, called Oquendo Senior Debt Fund I, with a target of €100m and a hard-cap of €150m. The fund provides senior financing to Spanish SMEs with revenues of €50-200m and works alongside local banks in structuring term loan B and other senior financing packages. It deploys up to €10m per transaction through direct investments and up to €30m in co-investments with its LPs.

Unquote understands that the fund has raised €140m so far, expects to hit its hard-cap by the end of 2019, and has already been almost 40% deployed.

Investors
The GP expects most of the LPs from its previous funds to re-up, including Banca March public fund-of-funds Fondo ICO Global, and several local insurance companies and pension funds.

In addition, it expects to receive commitments from at least six European investors, including the European Investment Fund, insurance companies and family offices. Around 60% of the capital will come from Spanish LPs and the remainder from LPs based in the rest of Europe.

Investments
Oquendo Mezzanine IV will provide a mix of hybrid instruments ranging from mezzanine financing to preferred equity and minority equity. It will deploy tickets in the €6-20m bracket and up to €40m in co-investments with its LPs.

It plans to make around 15 investments in companies generating EBITDA of at least €6m. The target companies will be primarily based in Iberia but the fund can deploy up to 30% of its capital in businesses located in the rest of Europe, and will be mainly looking at the French, Italian, UK and Nordic markets.

People
Oquendo Capital – Daniel Herrero, Alfonso Erhardt (partners).

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