Georges Ralli, former deputy chairman of Lazard Ltd., is raising a private debt fund of at least 150 million euros ($200 million) to invest in European health-care companies.
The IPF Growth Debt Fund 1 seeks to deliver an annual return of 15 percent to 20 percent by providing senior-ranking debt to medical technology, diagnostics and life sciences companies, according to a statement from London-based Avebury Capital Partners LLP, which is arranging the fundraising. The fund could also invest in equity to boost returns, it said.
Financing health-care businesses is a “compelling strategy right now” because of demand from aging populations in Europe and the U.S. as well as increasing spending in emerging markets, Ralli said in the statement. The former head of Lazard’s European investment bank said companies in the region find it difficult to get financing.
European banks are cutting lending as new standards from the Basel Committee on Banking Supervision more than triples the amount of core capital they must hold. The banks provided $131.3 billion of high-yield loans to European borrowers last year, down from $181.4 billion in 2011, according to data compiled by Bloomberg.
“There is strong interest among traditional private equity investors and others for debt strategies right now,” Avebury Managing Partner James Newsome said in the statement. “Growth debt funds typically pay high cash interest at a time when interest rates are very low.”
IPF will look to make six to 12 investments at 5 million euros to 30 million euros each, according to the statement.