17Capital saw its “strongest-ever” pipeline of deals in 2020 and consummated a record number of them.
The London-based firm closed 10 deals worth $1.5 billion across Europe, North America and Asia, according to a statement. This is from a deal pipeline of $20 billion across its preferred equity and credit platforms.
The $1.5 billion figure is roughly twice the deal value recorded in 2019, Secondaries Investor understands. A spokesman for the firm declined to comment on how much of this total was credit and how much was preferred equity.
The strong level of activity in 2020 was driven by growing interest from GPs in using portfolio financing to invest in product expansion, GPs managing leverage and optimising exit timings using top-up funding, and accelerating liquidity to LPs, among other factors, the statement noted.
Among the deals 17Capital has backed in 2020 are an up to £125 million ($166 million; €137.3 million) preferred equity financing for UK buyout firm Exponent Private Equity, Secondaries Investor reported in July.
Over the summer the firm unveiled a $1 billion net asset value-backed lending platform alongside a “significant” North American LP, sister publication Private Equity International reported. Preferred equity and NAV-based lending facilities are both secured against cashflows from a portfolio of assets.
17Capital is in market with its fifth preferred equity fund, which had raised €1.2 billion of its €1.8 billion target by October 2019, Secondaries Investor reported. It is understood that the fund had a 95 percent re-up rate from LPs in its previous funds.
There was $4.1 billion of preferred equity transactions in the six months to 30 June, an increase of 71 percent on the same period of the year before, according to a survey by advisor Evercore.
Fully 56 percent of secondaries buyers said they offered preferred equity during the period, compared with 21 percent at the end of 2019 as they aimed to take advantage of GPs’ need for liquidity to support struggling assets or make acquisitions brought about by the crisis, Evercore found.