LGT doubles debt assets with acquisition

The European secondaries investor picked up stakes in two European Capital debt funds from the firm’s previous owner, American Capital, as part of the acquisition announced last week.

LGT Capital Partners, the European alternatives manager with more than $55 billion under management, will nearly double its private debt assets with the acquisition of European Capital it announced last week.

LGT already has an opportunistic debt multi-manager offering, “focusing on secondary markets with currently $800 million assets under management”, Roberto Paganoni, chief executive of the firm, told Private Equity International. The European Capital transaction will add a further €700 million of private debt assets managed across two funds, as reported last week.

Paganoni said that while European Capital also manages some legacy private equity assets, the team moving to LGT is entirely debt-focused. European Capital lists a €100 million 2016-vintage private equity fund on its website that holds stakes in seven portfolio companies acquired through secondaries transactions.

The firm completed the final close on its European Capital Private Debt Fund in April, raising €473.5 million. The group also has a £100 million ($122 million; €116 million) fund focusing on UK-based SMEs. As part of the deal announced last week, LGT is buying stakes in both the European Capital debt funds from the firm’s previous owner, American Capital, which is part of Ares Capital. “It is a regular secondary transaction,” said Paganoni.

The 20-strong European Capital team will remain in their current premises in London and Paris, and at this stage it is unclear what will become of the European Capital brand, which has been part of the private capital landscape since 2005. Initially the brand will continue, Paganoni said, adding: “options for the future will be evaluated at a later stage”.