The new fund aims to deliver an efficient financial solution for private equity fund managers by providing liquidity through loans backed by the net asset value of their funds. This strategy enables fund managers to optimize the lifecycle of their funds, fostering long-term value creation.
The fund will be structured as an ELTIF domiciled in Luxembourg, has a target size of €50 million, with a hard cap of €80 million, and seeks to generate a net IRR of 11-14% for our investors. With a duration of 7 years, the fund focuses on providing between 10 to 15 NAV loans for lower mid-market private equity funds in Europe. Target regions include Benelux, France, DACH, Italy, the Nordics, Ireland, and the United Kingdom. The fund is now open to professional investors and, starting in Q2 2025, will also be available to retail investors.
This fund addresses a growing need in the market. Private equity funds often face liquidity challenges around their fifth year, precisely when they need additional capital to support the growth of their portfolio companies. Qualitas Continuation Finance I addresses this need with an agile solution designed to overcome the limitations of traditional banking.
The new fund will be developed in collaboration with Hark Capital, combining Qualitas Funds’ expertise in the European lower mid-market with Hark’s leadership in NAV financing. Founded in 2013 and part of the P10 platform, Hark Capital is a pioneer in the NAV loan market and a leader in the United States, having deployed over $1.6 billion across 130 successful transactions without any defaults. Its flexible and tailored approach has consolidated its position as a leader in the sector. In this collaboration, Hark Capital will handle loan structuring and risk management, leveraging its extensive NAV financing experience, while Qualitas Funds will contribute its deep knowledge of the European lower mid-market, identifying opportunities and strengthening its relationships with fund managers, to ensure an effective implementation aligned with the market needs.
Through this strategy, we aim to provide flexible capital to the best managers in the European lower mid-market, enabling them to retain control of their underlying companies while achieving high returns with a low-risk profile. Our commitment to this new fund is strong, with the founding partners investing €20 million to ensure full alignment of interests with our investors. We are confident that this new business line will strengthen our position as leaders in the European private equity market.
We are proud of providing leading solutions that generate value for both investors and fund managers. We will continue working on new offerings that reinforce our commitment to excellence and the development of differential strategies.
The news about the launch of Qualitas Continuation Finance I has been covered by the most relevant media outlets. You can find some of the published articles through the following links: