17Capital closes Fund II above target

The niche secondaries investor - which has helped firms including SVG with refinancing needs - had a 75% re-up rate for a fund that's more than double the size of its predecessor.

17Capital, a London-based specialist secondaries investor, has held a €208 million final close on its Fund II.

Launched in early 2012, the vehicle surpassed its €200 million target. It will seek investments of between €5 million and €50 million, to be made within the next three years. It closed its Fund I, a 2010 vintage, on €88 million.

Seventy-five percent of the firm’s existing LPs have re-upped, Pierre-Antoine de Selancy, managing partner at 17Capital, told Private Equity International. “Limited partners who reinvested in the fund have either doubled or quadrupled their commitments. This is a vote of confidence for what we do, which is rather different from the rest of the secondaries segment.”

The firm’s investor base primarily includes insurance companies, pension funds and a limited number of sophisticated family offices. Most of these are based in Europe and Canada, de Selancy said.

By contrast to many other secondaries firms, 17Capital doesn’t typically purchase limited partner positions in funds. Rather, the firm provides mezzanine and preferred equity financing to firms in need of fresh liquidity, either because they are looking to refinance or restructure their portfolio.

De Selancy thinks this profile fits well with investors’ needs in the current climate. “A number of firms that have raised funds in 2007-2008 have not made many distributions. Many of them are now trying to raise new funds, but investors are waiting to see more cash coming back before reinvesting. At 17Capital we give investors access to this liquidity, without them having to give up the potential upside of their current exposures.”

17Capital has already closed a first deal through Fund II. Last year, it helped SVG, a London-listed fund of funds, refinance one of its feeder funds, so that it could repay former lenders. The financial details were not disclosed.

Deals made through Fund I included transactions in the UK and German mid-markets, along with investments in large global and pan-European funds, de Selancy said.

17Capital was created in 2008. The first deal closed by the firm was the 2009 mezzanine investment of €30 million in a portfolio owned by Altamir, Apax France’s listed vehicle.