The firm has set up a credit arm that will provide financing for European and US private equity funds whose investment periods have ended, it said.
It has secured $ 100 million from investors for the lending strategy, according to a person familiar with the matter. The firm will also look to raise more capital for these debt deals, the person added.
Julian Mash, chief executive of Vision Capital, said: “This is an evolution of our model.”
Vision will provide credit to private equity firms that can be used to help grow their portfolio companies, repay debt, provide capital for add-on acquisitions and return cash to investors. It will pursue deals of between €25 million and €500 million through a variety of structures, including preferred equity and debt, the firm said in a statement.
Vision began discussions with private equity firms in Europe and the US earlier this year about debt deals, according to Mash. He said: “We have pioneered a number of different types of private equity transactions over the years and are now adding the provision of private, flexible… financing.”
This marks a considerable shift in strategy for the firm, which historically specialised in buying legacy assets from buyout firms’ portfolios, often when funds struggled to exit a portfolio company. Following the financial crisis, many firms have found new ways of dealing with legacy assets – for instance by pursuing fund restructurings that extend the life of the fund and give firms additional time to exit existing portfolio companies – which has meant that fewer have been up for sale.
The debt arm will be added to Vision’s existing private equity investment activities in Europe and North America, Vision said, but its main focus will be on the credit deals. Vision owns 18 companies that were acquired through its secondaries direct strategy. In the past two years it has not made any new investments but it has made 10 add-on acquisitions. The last private equity fund it raised was Vision Capital Partners VII, which closed on €680 million in 2009.