Merito Private Debt Fund

Established in December 2021 and operational from April 2022, Merito Private Debt is Merito SGR first proprietary investment fund. This fund counts among its subscribers some of the leading institutional investors active in private capital asset classes.

Highlights

Type: Closed-end reserved AIF

Asset Class: Performing Private Debt

Vintage Year: 2022

AUM: € 114 M

Status: investment phase

Investors

Merito Private Debt is a closed-end AIF reserved for institutional investors with a focus on Private Debt investments, PIR (“Piani individuali di risparmio”) compliant, i.e. qualified under the regulations on individual long-term savings plans.

The fund Investment Committee draws on Roberto Capretti as independent member.

INVESTMENT STRATEGY

The fund invests in a wide range of debt instruments, focusing on senior debt positions, both at an operational level and structurally subordinated, while adopting an opportunistic approach to equity or quasi-equity positions to complete the capital structure.

Thanks to its operational flexibility and to the wide range of instruments   offered, the fund addresses multiple financial needs of SMEs, including: (i) Private Equity – backed M&A transactions, (ii) entrepreneurs extraordinary financial needs, (iii) processes of organic growth and refinancing.

The main evaluation driver is the impact on the main-street economy, with a thorough analysis of the companies business plans, as well as historical performance, competitive context, and other qualitative factors.

The selection process is based on a fundamental “private” and cash-flow-based analysis, without any sector-specific focus, identifying targets that boast a competitive advantage in high-growth potential segments, capable of adapting to current changes in business paradigms. Significant attention is also paid to investment protection mechanisms.

The fund’s average investment is approximately €4-7 million, primarily in proprietary transactions, secured by the extensive network of the investment team, with a medium-to-long-term “Buy & Hold” strategy.

In its investment and monitoring strategy, the fund incorporates social and environmental sustainability criteria, excluding sectors deemed inconsistent with these criteria and promoting a positive impact in terms of ESG performance of the target.

The fund is among the first Italian AIFs to include economic alignment mechanisms for the investment team to the overall ESG performance of the portfolio.

INVESTMENT STRATEGY

The fund invests in a wide range of debt instruments, focusing on senior debt positions, both at an operational level and structurally subordinated, while adopting an opportunistic approach to equity or quasi-equity positions to complete the capital structure.

Thanks to its operational flexibility and to the wide range of instruments   offered, the fund addresses multiple financial needs of SMEs, including: (i) Private Equity – backed M&A transactions, (ii) entrepreneurs extraordinary financial needs, (iii) processes of organic growth and refinancing.

The main evaluation driver is the impact on the main-street economy, with a thorough analysis of the companies business plans, as well as historical performance, competitive context, and other qualitative factors.

The selection process is based on a fundamental “private” and cash-flow-based analysis, without any sector-specific focus, identifying targets that boast a competitive advantage in high-growth potential segments, capable of adapting to current changes in business paradigms. Significant attention is also paid to investment protection mechanisms.

The fund’s average investment is approximately €4-7 million, primarily in proprietary transactions, secured by the extensive network of the investment team, with a medium-to-long-term “Buy & Hold” strategy.

In its investment and monitoring strategy, the fund incorporates social and environmental sustainability criteria, excluding sectors deemed inconsistent with these criteria and promoting a positive impact in terms of ESG performance of the target.

The fund is among the first Italian AIFs to include economic alignment mechanisms for the investment team to the overall ESG performance of the portfolio.