Muzinich & Co first closes senior secured private debt fund

Muzinich & Co has first closed its European senior secured private debt fund at €104 million. The fund focuses on providing growth financing solutions for European middle-market companies and explicitly incorporates environmental, social and governance (ESG) considerations and monitoring into the investment process.

“Senior-secured debt instruments offer investors a lower-risk approach to private debt investing,” said Sandrine Richard, co-head of senior secured, Europe. “These instruments tend to have statistically higher recovery rates, possess superior documents and provide strong covenant protection.”

With a target net return of Euribor plus 4%, the fund will predominantly invest in euro-denominated senior-secured first line debt issued by European small and medium-sized enterprises (SMEs), excluding the UK.

Muzinich has been a signatory to the Principles for Responsible Investing (PRI) since 2010 and is applying experience gained from integrating environment, social and governance (ESG) considerations into the public debt investment process to its latest private debt strategy, added Archie Beeching, director of responsible investment.

“We believe that systematic inclusion of ESG into the due diligence process, investment committee meetings and portfolio company engagements will make a positive contribution to this fund,” he said.