17Capital raises USD 4.5bn across preferred equity strategies

The remaining USD 1.6bn has been raised across the firm's separately managed accounts and co-investment capital.

17Capital Fund 5 was launched in July 2019, according to Unquote Data. The vehicle had a EUR 1.8bn target and held an interim close on EUR 1.2bn in October 2019.

Its predecessor fund, 17Capital Fund 4, held a final close in May 2017 on EUR 1.2bn, surpassing its EUR 800m target.

The firm said in a statement that the impact of the Covid-19 pandemic has accelerated the long-term growth of the portfolio financing market, with the industry increasingly adopting such facilities.

17Capital is based in London and New York. The firm has significantly grown the size of its funds and the scale of its investments since raising its 2009-vintage EUR 88m debut vehicle.

To date, the firm has made 64 transactions and 32 exits, investing a total of €4bn and generally focusing on Europe and the US.

Investors
17Capital Fund 5 drew commitments from around 90% of the firm's existing investors, with 50% of its total capital coming from new investors.

The LP base comprises pension, insurance, endowment and sovereign wealth funds from Europe, the US and Asia, according to a statement. These include Connection Capital, according to Unquote Data.

Investments
The vehicle follows the strategy of its predecessor funds, providing flexible and non-dilutive portfolio financing for fund managers in the form of preferred equity. Its products aim to increase the amount of capital available to managers and to allow them to generate liquidity, providing them with capital without exiting their investments.

The firm provides financing in return for exposure to cashflow from a base of at least four underlying portfolio companies, management fees, or carried interest payments. These are accrued as payment-in-kind (PIK) notes. Once these assets are sold, 17Capital receives back its investment and the proceeds of the accrued PIK.

The firm said in a statement that it had completed 13 portfolio financing deals with an aggregate value of USD 2.7bn in the past year, having reviewed potential transactions worth more than USD 20bn.

The firm's recent activity includes a portfolio finance facility of more than USD 200m for Investcorp, as reported. Unquote reported in July 2020 that the firm provided a GPB 125m preferred equity facility to Exponent Private Equity Partners III.

People
17Capital – Pierre-Antoine de Selancy (managing partner).

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