Park Square Capital, LLP, the London-based credit products investment adviser, has launched Europe's largest Credit Opportunities Fund by equity commitments. The fund will be leveraged and is expected to total approximately EUR1.25 billion once fully invested.
Robin Doumar, Managing Partner of Park Square, said: 'The Credit Opportunities Fund reinforces Park Square's focus on 'large size' credit investing and our ability to continue building diversified portfolios of investments with attractive risk-adjusted returns. This fund builds on the success of our existing mezzanine fund, allowing us to serve our client base more effectively.
'Amidst competitive syndicated and private equity markets, we believe that this Fund has significant advantages in its scale, flexibility and patient structure, which will position us well to capitalise on changing market conditions.'
Park Square, established in 2004, raised the largest independent European mezzanine fund of EUR1.05 billion in 2004, which is now more than 50% invested.
The new fund has already attracted EUR 315 million of equity commitments, and, according to the firm 'features a significant co-investment strategy with a high quality investor base, including repeat investors from Park Square's first fund.'
Caisse de dépôt et placement du Québec, Ontario Teachers' Pension Plan and a third Canadian institutional investor and the Park Square team have committed EUR 315 million of equity to the Fund. These institutions are existing investors in Park Square's first mezzanine fund.
The fund has the ability to commit up to EUR 500 million per transaction, together with Park Square's mezzanine fund and the Fund's Limited Partners. The firm stated: 'Given the Fund's ability to draw capital as needed, it has limited pressure to 'ramp-up' and has the ability to alter investment strategies over time to take advantage of changing market conditions.'
The new fund will provide first lien, second lien, mezzanine, high yield and equity financing and also has the ability to invest in distressed debt.
There has been significant growth in the volume of European leveraged loan issuance, which has increased from approximately EUR 70 billion in 2004 to over EUR 150 billion in 2006, and over EUR 50 billion in the first quarter of 2007 alone (source: LCD Comps).
Park Square was launched in 2004 by Robin Doumar, formerly head of Goldman Sachs' European mezzanine business, and founder partners David Cottam and Michael Small, previously Head of International Equity Capital Markets at BNP Paribas, and Director of Dresdner Kleinwort's Debt Principal Finance and Securitisation Group, respectively.
Nikola Sutherland, formerly a Vice President of JP Morgan's Leveraged Finance Group, joined as a partner and Chief Financial Officer in November 2004 and, since then, Park Square has significantly expanded its investment team and now employs 15 investment professionals, comprising eight nationalities.
Park Square's mezzanine fund has invested a total of EUR 920 million in 12 transactions in the past two and a half years, including approximately EUR 350 million of co-investment generated for its first mezzanine fund investors.