- Ecus Private Debt is a US$ 75 million product specific fund focused on bridging the financing gap faced by small and mid-sized companies
- The Fund will provide flexible debt and equity-like instruments to companies (i) with annual revenues between US$ 30–200 million, (ii) looking to finance expansions, acquisitions, management buyouts and recapitalizations, and (iii) whose needs are not fully met by traditional financing alternatives
- It will also participate in project finance transactions by either helping project sponsors finance their equity stake or by increasing the project’s leverage
- Financing structures could include mezzanine debt1, unitranche2 and other flexible debt solutions, typically between US$ 5 million and US$ 10 million per transaction, tailored to the borrower’s specific needs and cash flows
- Targets should have sound historical performances, experienced and incentivized management teams, predictable cash flows and a substantial asset or enterprise value relative to loan value
- The Fund will provide a stable and attractive risk-adjusted return composed by a 4–6% annualized yield (net of management fees) and a target net IRR of 12%, with returns driven by a combination of cash interests (distributed quarterly or semi-annually), PIK3 interests (compounded and paid at maturity) and profit sharing rights and/or equity components, enabling the Fund’s participation in potential upsides of the business
- Its vast experience managing mid-market companies and solid understanding of the complexities of doing business with them will allow Ecus to bring continent operating skills to the table in case need be
Note: (1) Subordinated debt with embedded equity instruments. (2) Type of debt instrument combining senior and subordinated debt. (3) Payment in kind: periodic form of payment in which the interest payment is not paid in cash but rather by increasing the principal amount by the amount of the interest.