Coller raises bar with credit secondaries fund close

Coller Capital has laid down a marker by raising nearly double the target for its debut credit secondaries fund.

The London-headquartered firm has raised around $1.4 billion for Coller Credit Opportunities I and co-investments, according to a statement. The fund launched in May 2021 with a target of $750 million. It is not clear which LPs have invested in the fund.

CCO I is the world’s largest pool of LP capital dedicated to private credit secondaries, Coller said.

“CCO I is our first dedicated fund for private credit secondaries, but it is not our first foray into private credit investing,” said Michael Schad, head of Coller Credit Secondaries. The three partners who lead Coller’s credit secondaries team have invested together for a dozen years, he added.

The credit team is led by Schad, Ed Goldstein and Martins Marnauza, Secondaries Investor reported in May. The firm has invested more than $3 billion in the asset class through its flagship funds, the latest of which, CIP VIII, raised $9 billion by final close in January 2021.

Coller wanted to raise a credit fund partly so that it could offer liquidity to sellers that want to offload different types of asset in one go, Secondaries Investor reported.

In August, Coller invested $580 million in a transaction to take a portfolio of credit stakes off the balance sheet of Chinese insurer Ping An Overseas Holdings into a separate vehicle, Secondaries Investor reported. The portfolio comprised four stakes in funds managed by North American and European GPs, accounting for 400 positions.

The deal was described as the “world’s largest private credit secondaries transaction” by Coller.

The credit secondaries market was transformed in 2021 by big new entrants. In March, Ares Management acquired Landmark Partners in a deal worth $1.08 billion. The credit secondaries market would be a key area of growth for Landmark, Ares said at the time.

In April, Apollo Global Management said it was launching a credit secondaries business to be co-led by incoming Goldman Sachs partner Earl Hunt. Apollo Credit Secondaries would have $1 billion to deploy, backed by the firm’s insurance clients.

According to Dan Roddick, founder of adviser Ely Place Partners, at the start of 2021 the private credit secondaries market was an estimated $5 billion to $10 billion in size, although investors are yet to define the exact total.

“To think of it solely as the transfer of interests in funds from one LP to another would hugely underestimate its size,” Roddick said.