ICG takes EUR 1.45bn ESG-linked facility for Europe VIII

ICG Europe Fund VIII has a target of EUR 7.5bn and was registered in February 2021, according to Unquote Data. The vehicle is expected to follow the strategy of its predecessors, providing loans of EUR 100m-700m to European mid-market companies with enterprise values of EUR 300m-1bn.

The fund's investments to date include Sweden-headquartered cloud and IT service specialist Iver.

LPs in ICG Europe VIII include US pension funds Teachers' Retirement System of Louisiana and the State Of Connecticut Retirement Plans and Trust Funds, according to Unquote Data.

Standard Chartered Bank, BNP Paribas, ANZ Banking Group, ING and Royal Bank of Canada arranged the facility, with Standard Chartered Bank acting as coordinator, mandated lead arranger, ESG coordinator and facility agent.

The facility will provide liquidity for the fund, ICG said in a statement, as well as integrating ICG's ESG and climate ambitions, which focus on climate change, employee engagement, diversity and inclusion. ICG has set its targets based on the Sustsinable Finance Disclosure Regulation, the firm said in the same statement.

The facility will require the fund's portfolio companies to set carbon emission reduction targets in line with a science-based target (SBT) set out in the Paris Climate Agreement.

Allen & Overy advised the lenders, while ICG was advised by Ashurst.

Although ICG's facility is one of the most notable ESG-linked fund financing lines for debt funds to be announced in recent months, PE players including AlpInvest and Waterland have both announced ESG-linked loans for their funds this year. Bluewater Private Equity also announced an ESG-linked NAV facility for its debut fund in May 2021 backed by Investec, as reported.

People
Intermediate Capital Group – Benoît Durteste (CEO, chief investment officer); Elmear Palmer (head of responsible investing).
Standard Chartered Bank – Clare Francis (regional head, client coverage, Europe, corporate, commercial and institutional banking).

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