17Capital invests €100m preferred equity in European fund

The preferred equity lender stated the funds provided would enable the manager to "invest further in their existing portfolio companies and maximise value for their investors".

The private equity firm is an "established" manager with more than €10bn in assets under management and a "long track record across several cycles", according to a statement from 17Capital.

List of European managers that have raised between €10-20bn in aggregate since 2005

source: Unquote Data

17Capital offers capital to investors in the form of preferred equity or unsecured loans, with a view to helping them build their portfolio or generate liquidity for their shareholders. 

Previously popular with secondaries funds, preferred equity is set for a massive boost in popularity for buyout vehicles in the current environment, as recently explored by Unquote's Denise Ko Genovese.

"There has been a noticeable increase in the number of enquiries about these types of transactions," Travers Smith's Sam Kay previously told Unquote. "The benefit of a preferred equity structure is that it can be implemented relatively quickly and it does not necessarily require LP involvement or consent. It also means the fund retains the upside after the preferred equity instrument has been repaid."

17Capital is reportedly in the process of raising its fifth fund for the strategy, with a target of €1.8bn. Founding partner Pierre-Antoine de Selancy said his firm has been inundated with queries for preferred equity, with enquiries totalling $3bn between mid-March and mid-April – with 90% coming from GPs. This is compared to $10bn for the 12 months to the end of 2019, which consisted of a more diverse range of clients (GPs, LPs and family offices).

Preferred equity was also discussed as part of Unquote's most recent podcast:

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