Five Arrows, the alternative assets division of Rothschild & Co, has recently reached a significant milestone with the final closing of its latest fund, Five Arrows Debt Partners IV, also known as FADP IV. This fund has garnered a total of €2.4 billion in commitments, surpassing its initial target of €2 billion. This achievement represents a significant increase of more than 70 percent when compared to the previous fund, Five Arrows Debt Partners III, which raised €1.4 billion.
FADP IV is designed to support mid-market companies in both Europe and North America through its Direct Lending strategy. This means that the fund offers various types of debt financing, which can be either senior or junior, to help these companies grow and thrive. Five Arrows prides itself on offering tailored and flexible financing solutions, allowing for a range of investment options that cover the entire capital structure.
This includes senior-secured unitranche loans, second lien loans, mezzanine financing, PIK facilities, and preferred equity structures. In addition to partnering with private equity sponsors, FADP IV also focuses on providing customized financing solutions for businesses owned by families or entrepreneurs.
Deployment of FADP IV is already well underway, with over half of the commitments allocated across 19 different transactions. True to the mission of the larger Five Arrows platform, these investments have been directed toward sectors that are not only resilient but also experiencing growth. Key areas of focus include data, software, IT services, healthcare, education, and business services. Since its inception in 2012, the team has strategically concentrated on these sectors as part of its direct lending strategy.
The latest fundraising efforts for FADP IV follow a string of successful funds, including Five Arrows Debt Partners III, Five Arrows Direct Lending, and Five Arrows Credit Solutions. The strategy is managed by a diverse professional team comprising 26 individuals from 10 different countries, who are based in major financial hubs such as London, Paris, New York, and Luxembourg.
The strong support for FADP IV has come from a wide-ranging investor base that includes insurance companies, pension funds, well-known financial institutions, family offices, and high-net-worth individuals. A noteworthy statistic is that approximately 70% of the commitments came from investors who have previously supported Five Arrows, which speaks volumes about their continued confidence in the direct lending platform. Additionally, Rothschild & Co, along with the executives managing the fund, has made significant personal commitments, reinforcing their belief in the fund’s potential.
KEY QUOTES:
“We are delighted with the success of the FADP IV fundraising and are grateful for the trust and support from both our existing as well as new investors. We are particularly pleased to have such a significant proportion of repeat investors from our previous direct lending funds, as well as from across the broader Five Arrows platform.”
Edouard Veber, Co-Managing Partner of the Fund
“We believe that the combination of our experienced team, proven track record and focused and selective investment strategy, supported by the global Rothschild & Co network, has made FADP IV an attractive proposition for a diverse group of sophisticated international investors.”
Martin Hook, Co-Managing Partner of the Fund
