Kreos raises about $433 mln for fifth growth debt fund
Kreos Capital has closed its fifth oversubscribed Israel and Europe-focused growth debt fund at a hard cap of 400 million euros (about $433 million).
Kreos V is the largest growth debt fund in Europe and Israel and with EUR 400 million of equity commitments it is also one of the larger overall growth capital funds dedicated to the region.
The final close and launch of Kreos V enables Kreos to invest EUR 150-200 million per annum from its fund platform and support an additional 100 fast-growing companies, their management teams and equity investors in Europe and Israel, across all stages and a wide range of industries, with direct lending of up to EUR 30 million in single transactions and larger total funding as a company develops.
Kreos V was launched at the beginning of January 2016 and due to its robust deal flow and the market’s strong demand for growth debt it has already closed its first commitments to more than half a dozen high-growth companies in Europe and Israel.
Kreos V’s top-tier institutional investors include a wide range of public and private pension funds, insurance companies, endowments, asset managers, funds of funds and family offices from Europe and the US.
Mårten Vading, co-founder and General Partner of Kreos, said: “Kreos V is a continuation of our development and our dedication to the European and Israeli growth ecosystem over the last 18 years. As the largest and most established growth debt provider in Europe and Israel, we are excited to take the next step and continue to support portfolio companies and their equity investors with flexible loan structures. The demand for Kreos V from institutional investors has been exceptional, the fund closing was executed in advance of the start of the fund’s commitment period in January 2016, and we are very pleased to welcome back our existing as well as new top-tier global investors in Kreos V.”
Kreos provides direct lending solutions alongside top-tier equity investors to growth companies, across all stages of a company’s development, to address the different needs of growth capital, working capital, acquisition financings, lower mid-market buy-outs, roll-up strategies, banks re-financings as well as pre- and post-IPO financings.
Kreos has invested more than EUR 1.4 billion in over 400 companies over the last 18 years and our current portfolio of high-growth companies and some recent exits include companies such as Altair, Delivery Hero, Bookatable, Westwing, Gett, Heptagon, Mister Spex, Kaminario, ReWalk, Wahanda, Crytek, Fyber, Symetis, Nabriva, Kreditech and SolarEdge.
Ross Ahlgren, co-founder and General Partner of Kreos, said: “European and Israeli high-growth companies face particular financing challenges, which are hard for traditional banks to support. Growth companies prioritise growth over profit, and focus on long-term value-creation, rather than on short-term cash flows. They are also expanding internationally to address global markets, which increases complexity. Kreos’s experience and understanding of growth companies and our dynamic approach to risk allows us to work closely with the companies and their equity investors both in good times and when there are more challenges. As the journey from growth stage to a successful exit is not normally in a straight line, it is extremely valuable to be able to rely on the flexibility and longevity of Kreos as a debt provider.”
Kreos’s facilities are structured as operationally flexible, non-covenant loans, with minimal dilution for management teams and equity investors. Kreos’s stable team has a proven 18 years track record of adding value to portfolio companies and helping them to grow with additional capital and flexibility throughout their business cycle and different market environments. The strength of Kreos is further supported by the funds being backed by long-term equity capital from top-tier institutional investors. Kreos’s international fund management platform in Europe and Israel and the extensive track-record of private lending, enable strong global networks as well as local capabilities in each market.
For the Kreos V fund-raising, Azla Advisors, led by Managing Director David Waxman, served as placement advisor, with Tom Beaudoin and Greg Barclay of Goodwin Procter serving as lead counsel to Kreos Capital.