Kreos Capital holds €700m close for sixth growth debt fund

Alessia Argentieri
28 February 2019

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London-based debt fund manager Kreos Capital has held a тЌ700m final close for its Kreos Capital VI growth debt vehicle, surpassing its initial тЌ600m target.

The fund is larger than its predecessor, Kreos Capital V, which closed on its €400m hard-cap in January 2016.

Azla Advisors served as global placement agent, with the support of Growth Capital Services for US placement. Goodwin Procter acted as lead counsel to Kreos Capital and Carey Olsen advised on the fund's establishment as a Jersey Expert Fund.

Kreos is able to structure a loan across multiple jurisdictions and typically provides flexible financing alongside well-known equity sponsors.

Investors
Kreos Capital VI's LP base consists of a diverse range of US and European institutional investors, including two sovereign wealth funds, public and private pension funds and insurance companies, and university and charity endowments. In addition, two new Asian investors also committed to the fund. According to the GP, Kreos VI experienced strong re-up and increased allocation from previous investors.

Investments
Kreos Capital VI provides growth debt financing to companies generating revenues of more than €200m, based in Europe and Israel, and operating in the technology and healthcare sectors. The GP has already started to deploy capital from the fund and expects to invest around €250-300m per annum over the coming years.

The vehicle deploys growth financing of more than €50m in single transactions, with additional follow-on funding as the company develops – and can lend significantly higher amounts in combination with its investors. Furthermore, the vehicle provides scalable debt facilities and flexible loans with no covenants and minimal dilution for management teams and equity holders.

This flexible investment approach is based on amortisation – with paybacks on a regular basis from early on in the deal – and senior security, which allows the GP to play a significant role as the company's growth plans evolve.

Kreos Capital – Ross Ahlgren (general partner).