German funding financial institution Yielco has introduced the primary closing of its new senior debt fund of funds programme.
Yielco Senior Debt II is a continuation of the agency’s senior direct lending technique, and is aimed toward risk-averse traders.
The agency additionally revealed that it plans to launch extra personal debt product initiatives within the space of specialty lending earlier than the top of the yr.
“Yielco’s first era senior personal debt fund of funds programme is already totally invested and is displaying a satisfying and steady efficiency with a present gross yield of round 11 per cent and a loss price of solely 0.5 per cent (together with unrealised losses),” mentioned Dr Matthias Unser, founding associate and member of the manager board of Yielco.
Learn extra: HSBC expands direct lending enterprise into Europe
“Yielco Senior Debt II presents traders an alternative choice to liquid fixed-income securities, offering steady returns within the excessive single-digit vary in addition to robust threat safety and variable-rate loans.
“A fast portfolio build-up with a excessive funding price from as early because the fourth quarter of 2024 leads to a brief start-up interval. Together with the low prices, this results in a really flat or, at finest, non-existent J-curve.”
Dr Unser added that Yielco’s secondary market presents traders an rising variety of alternatives for fast portfolio build-up and early curiosity distributions. The fund additionally presents an accumulating share class, which “ensures environment friendly capital deployment by robotically reinvesting capital repayments.”
Learn extra: Nera Capital nets €150m funding
The brand new fund focuses on senior secured loans for decrease mid-market corporations. It is going to be constructed from roughly 10 fund participations, encompassing greater than 300 loans, with European transactions accounting for greater than 80 per cent of the portfolio.
Yielco added that it has a brand new specialty lending product within the personal debt pipeline, and expects to announce its first closing within the fourth quarter of this yr. That fund of funds will deal with personal debt area of interest methods with a deal with asset-based loans.
Over the following few years, Yielco plans to construct up a non-public debt portfolio price a minimum of €100m (£84.24m), with a deal with direct lending.
Learn extra: Decide-up in dealmaking presents new alternatives for personal credit score managers