Pomona Capital has made a another sizeable preferred equity investment in a European fund after a landmark 2019 deal.
The New York-headquartered secondaries investor extended two preferred equity tranches worth a combined €160 million to Milan-headquartered buyout shop Aliante Partners, according to a statement. One will provide a liquidity option to limited partners in 2013-vintage Aliante Equity 3, the other will provide capital for add-on acquisitions in the portfolio.
Cebile Capital advised on the process.
“The transaction is a very good outcome for our existing shareholders as it provides them with the option to realise an exit and provides follow on capital for add-on acquisitions to the companies,” said Aliante managing partner Paolo Righetto in the statement.
Aliante targets “Made in Italy” sectors such as food and beverage, design and furniture, which the country is well regarded for. It primarily operates a buy-and-build strategy focused on the mid-market, the statement noted.
The size of Aliante Equity 3 is unclear. Investors include BMO Private Equity Trust, according to its website.
In late 2019, Pomona extended a back-levered preferred tranche to London-headquartered Palamon Capital, touted as the first such deal of its kind. Pomona borrowed a portion from the bank at a lower interest rate, allowing it to lend more cheaply, with the bank being paid back via preferential cashflows from Palamon’s portfolio. It was Pomona’s first European preferred equity deal, Secondaries Investor understands.
Pomona is in market with its 10th secondaries fund, targeting $2 billion, according to Secondaries Investor data. Investors include Fubon Life Insurance, which has committed $70 million.