Zurich Invest Middle Market Lending Europe I

Middle Market Lending Europe

Middle market (direct) lending is also referred to as "corporate private debt". The objective is the granting of loans by a very small group of lenders to medium-sized enterprises, e.g. for growth or acquisitions.

Learn more through our explanatory videos (German)

200

Billion euro

Approximate size of the European market for private debt

> 2,5

Trillion euro

Decline in domestic bank financing

10-100

Million euro

Comprises the EBITDA of the most important medium-sized enterprises

What sets our manager apart?

Independent private debt specialist with local presence at eight locations
Has the necessary size for bilateral loans
The investment process considers ESG aspects on an ongoing basis and results in a borrower ESG rating

Proven capital investment of more than EUR 14 billion, invested in more than 100 companies
140 specialists (Pemberton Group) and a leadership team with an average of more than 20 years of experience
Dual-track investment process with two independent teams for credit acquisition and credit analysis

Fewer details

More details

Diversification

Pan-European model allows for broad diversification
Cap on UK exposure of 35 percent
Focus on defensive sectors with a cap of 25 percent
Limitation of borrowers who have the same private equity sponsor to 10 percent
Average allocation per borrower of 3 to 4 percent

Reduction of credit risk

Priority and risk limits ensure compliance with the investment philosophy
Only senior secured loans
Exclusion of cov-lite loans
Additional restrictions with regard to the credit quality and debt ratio

Attractive conditions

Pemberton provides for selectivity and negotiating power
Focus on companies with EBITDA of EUR 10 to 100 million
Focus on bilateral loans
Credit structuring fees are fully passed on for the benefit of the investors

Institutional approach and service

Focus on institutional customers
Experts on site in Europe's most important legal areas
Dual-track investment process with independent loan team
Detailed risk assessment and a progressive IRB model
ESG aspects are taken into consideration in every process step and are subsequently regularly monitored

Only senior secured loans

The focus on senior secured bilateral loans ensures priority with regard to the capital structure, control and negotiating power vis-à-vis borrowers.

Expert partner

Pemberton has a very experienced team with a local presence in Europe's most important markets and is thus a premier partner in the field of direct lending.

Cost-effective and tax-efficient structure

Lux RAIF structure (Reserved Alternative Investment Fund) offers regulatory security, tax efficiency and low costs. What is more, the portfolio guidelines have been custom-tailored for institutional customers in Switzerland.

The target portfolio in a nutshell

Focus on bilateral loans in the core middle market in Europe
Senior secured corporate loans with variable interest rates
Appropriate diversification across countries, industries, private equity sponsors and borrowers

Focus on loans to companies with low capital commitments and high capital efficiency in defensive sectors
Proprietary exclusion list for borrowers, controversial sectors and climate

Would you like to know more about the performance of Middle Market Lendig Europe I or II?

Order the factsheet here.

Name	Zurich Invest Middle Market Lending Europe II (EUR hedged)
Legal structure	Lux RAIF (Zurich Privat Debt Europe LUX RAIF)
Investor group	Institutional investors domiciled in Switzerland
Currency	Euro (EUR) (non-euro investments are hedged against the Euro)
Administrator	Bank of New York Mellon (BNY)
Loan administrator	Erste Financial Services GmbH (EFS)
Auditor	PricewaterhouseCoopers (PwC)
Target size	Approx. EUR 300-500 million
First close	July, 8th 2022
Final close	July, 7th 2023
Investment periode	3 years (capital calls in EUR: D+5 banking days)
Minimum commitment	EUR 5 million
Duration	8 years, closed structure (option to renew by 2 x 1 year)
Management fee	1.0% (on the invested capital)
Performance fee	10.0% (at a hurdle rate of 5.0%)
Expected total expense rate	Approx. 1.8% (depending on the performance fee)