17Capital closes Fund 4 on €1.2bn

The preferred equity pioneer had a 90% re-up rate in its latest vehicle that exceeded its initial target.

17Capital, a London-based preferred equity and unsecured loans specialist, has closed its fourth fund on €1.2 billion, three months after Secondaries Investor reported the firm was nearing the final close on the fund.

17Capital Fund 4, which closed above its initial target of €800 million, was raised in six months, according to a statement.

No placement agents were used, managing partner Pierre-Antoine de Selancy told Secondaries Investor.

More than 90 percent of the new fund is made up of re-ups, including from pension funds, insurance companies, university endowments and family offices from Europe and North America. New investors include Canadian pension plans, according to de Selancy.

Fund 4, which was registered in the UK in June last year, has already started investing. As with 17Capital’s previous funds, it is taking an opportunistic approach across Europe and North America with no sector-specific strategy.

17Capital’s previous fund, Fund 3, closed in summer 2014 on €500 million, above its €450 million target, according to PEI data. Investors in that fund include Idinvest Partners, Healthcare of Ontario Pension Plan and insurance company Royal London Group.  Fund 2 closed €8 million above target on €208 million in 2012. The debut fund, which launched in summer of 2010, closed in December of that year on €88 million against an undisclosed target.

17Capital’s preferred equity model addresses a gap between debt providers and secondaries buyers. Sellers take on preferred equity, which ranks between debt and equity in the capital structure, rather than selling their portfolio stakes. By doing this they retain exposure to any upside, which would be lost in a secondaries sale.

17Capital was formed in London in 2008 and opened a New York office last year. Its 23 investment professionals focus on Europe and North American investment opportunities ranging from €10 million to €500 million in value.

One of 17Capital’s biggest rivals in the preferred equity strategy, Toronto-based Whitehorse Liquidity Partners, also closed its fund on Monday, as Secondaries Investor reported. Whitehorse Liquidity Partners Fund I closed on its $400 million hard-cap against a target of $300 million.