Investcorp closes €340m fund to invest in Italian non-performing debt market

Italian NPL Fund II will invest in distressed loans secured by residential and commercial real estate in the European country

Investcorp on Monday said it closed a new fund with €318 million in commitments . Courtesy Investcorp

Bahrain-based alternative investment manager Investcorp closed a new fund targeting Italian distressed debt with €340 million (Dh1.37 billion) in commitments as it continues to invest in Italy’s non-performing loan market.

The fully subscribed vintage Italian Distressed Loan Fund II is Investcorp’s second such investment vehicle and is being advised by Eidos Partners, a Milan-based advisory firm and credit specialist, Investcorp said in a statement on Wednesday.

Italian NPL Fund II will invest in distressed debt secured by residential and commercial real estate in the European country.

“Several years ago we identified that many banks across Italy would need to reduce their credit exposure and strengthen their balance sheets, creating opportunities for investors with strong underwriting expertise,” Timothy Mattar, global head of distribution at Investcorp, said. “We know the Italian NPL market well and we have further strengthened our capabilities through partnerships with dedicated local expertise.”

More than €460m in assets have so far been allocated to Investcorp and Eidos Partners’ Italian non-performing loans strategy, the company, said.

The latest fund is Investcorp’s ninth special opportunity portfolio fund. The company,which counts Mubadala Investment Company as its biggest shareholder, launched its first special investment vehicle in 2011 to take advantage of opportunities arising from market dislocations and structural shifts.

There are “compelling” opportunities to acquire loans at significant discounts in the Italian NPL market, Elena Ranguelova, portfolio strategist, said.

The latest fund will help fulfil an important market need and “we are committed to leveraging our expertise and resources to create value and help Italian consumers and businesses during this time”, she said.

The company, which had $31.1bn of assets under management at the end of 2019, closed a $275m first funding round in April for its food sector-focused private equity platform. The investment vehicle aims to invest in the growing, but fragmented food sector in Asia.

Investcorp's portfolio of investments span a broad range of sectors and industries. The company plans to allocate "a significant proportion" of the $1bn-$2bn of annual private equity investments planned over the next two years to technology assets, as it looks to capitalise on growing tech reliance in the wake of the global coronavirus pandemic, Gilbert Kamieniecky, the head of the company's technology private equity business, told The National earlier this month.

Since its inception in 1982, Investcorp has made over 195 private equity deals in the US, Europe, Asia, and the Mena region. It has also made more than 800 commercial and residential real estate investments in the US and Europe, with a total transaction value of $61bn.