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Private Debt Investor: LCM gets $350m from Arizona

31/10/2016

The London-based specialist credit investment firm has raised more than €2bn in total for its Credit Opportunities III strategy.

LCM Partners, the London-headquartered credit investor, is today set to announce the final closing of its Credit Opportunities III strategy on just over €2.0 billion.

The amount raised includes €865.5 million for a commingled fund plus a number of managed accounts. One of these came in the form of a $350 million commitment from the Arizona State Retirement System.

PDI had previously revealed in May this year that the LCM strategy had received backing to the tune of $100 million from the Teachers Retirement System of the State of Illinois.

The strategy had an initial target amount of €1.0 billion, which was subsequently raised to €1.5 billion. It is understood that investor interest amounted to €2.7 billion of potential commitments, with the final closing
limited to those investors able to sign off in time.

LCM, which has a 17-year track record and delivered a 14.9 percent (gross, unleveraged) return, had previously invested on a proprietary basis over €1 billion of on-balance sheet and co-invests. In a joint venture with Insight Investments, LCM raised two funds in 2010 and 2012 for a combined €420 million.

Towards the end of September, we reported that the firm had had its busiest-ever summer, deploying €450 million of capital. The firm reportedly closed a £200 million deal involving a rescheduled loan portfolio from a large UK consumer finance issuer, a €90 million performing loan book acquired from BBVA in Italy, and the purchase of a loan book and operating business – Everyday Finance – in Ireland.

Two years into the deployment of the Credit Opportunities III strategy, the firm is currently delivering an unleveraged IRR of 12.44 percent, which it told us last month was in line with what it had expected.

LCM typically targets mid-market deals of €5-75 million across consumer and SME loans including credit cards, mortgages, personal and commercial loans, retail credit, auto loans, leasing and asset finance, utility bills, and the consumer public sector.