Alternative asset manager Cheyne Capital Management (Cheyne Capital) has closed its inaugural European Strategic Value Credit Fund (SVC) having scaled back subscriptions to the Fund’s capacity limit of EUR1 billion.
The Fund, launched one year ago and managed by veteran credit investor Anthony Robertson, employs a value-oriented, opportunistic credit strategy which seeks to capitalise on the accelerated sell-down of legacy mid-market corporate loans by European banks, and to take advantage of increased dislocation and heightened illiquidity in sub-investment grade credit markets as the current late-stage credit cycle advances.
The Fund’s investor base comprises a wide range of institutional investors across Europe, the Nordics, North America and the Middle East, including public and corporate pension plans, insurance companies, endowments and foundations, and a sovereign wealth fund.
“SVC’s strategy is a perfect fit with Cheyne’s mission to seek to uncover attractive, uncrowded investment opportunities presented by dislocations and to identify the best ways of delivering their value to investors,” says Jonathan Lourie (pictured), CEO and co-Founder of Cheyne Capital. “The strong demand we have seen from investors across geographies reflects the growing need and desire to diversify their fixed income and private credit investment portfolios into opportunistic strategies that will address the dynamics presented by changing market cycles.”
The Fund’s focus is on acquiring the debt of stressed middle-market businesses, with average transaction sizes of EUR10 – 50 million, which fall below the radar and mandate of larger distressed and special situations funds. It will aim to hold between 25 and 30 positions and has already deployed capital into eight investments across continental Europe.
“With crowded positioning in large-cap situations and unattractive valuations in mainstream sub-investment grade credit markets, we believe this mid-market segment represents an attractive opportunity for those with sufficient depth of expertise and origination capability in the relevant European markets,” says Anthony Robertson, CIO of Cheyne Strategic Value Credit. “We are delighted to have assembled such a collectively high profile and diverse group of investors as partners in this endeavour, and we are looking forward to a long and successful collaboration.”
The successful close follows Robertson’s establishment of the Cheyne Strategic Value Credit business last year, which has seen him build a 12-strong team and extensive origination platform covering public and private debt markets. Robertson joined Cheyne from BlueBay, having previously headed the firm’s EUR14 billion Global Leveraged Finance group.
