The firm that Francesco Fedele founded raised 3 billion euros from German investors launched two new funds in support of its international expansion.
German private debt investor BF.capital, a firm that serial entrepreneur Francesco Fedele founded in 2017, aims to fetch 160 – 170 million euros for its Italian operations.
In 2021, BF.capital launched BF.capital Real Estate Debt Fund I, a vehicle for institutional investors with assets under management worth 500 million euros.
In 2023, German insurer W&W acquired 35% of Fedele’s BF.capital and appointed it as advisor for corporate private credit funds worth 2.5 billion euros.
Francesco Fedele
Eugenio Sangermano, the former head of business development of W&W Ireland, became ceo of BF.capital which is now launching a real estate debt fund for the German and Austrian markets and a paneuropean corporate credit fund of funds. Each of the vehicles aims to raise 250 million euros. “We intend to fetch around a third of these resources in Italy and aim to open a bureau in Rome or Milan ahead of an expansion in France and Benelux”, Sangermano said to BeBeez on 8 May, Friday, after the BF.ddirekt presentation at the Four Season Hotel in Milan that AIFO (Italian Association of Family Offices) organised. The event attracted the keen interest of associates as real estate credit is a pivotal asset class for family offices, AIFO chairwoman Patrizia Misciattelli said to BeBeez.
Sangermano also pointed out that despite the current Germany’s challenging economic climate, the property market in the country offers many opportunities, ranging from the conversion of derelict industrial sites into sustainable logistics facilities or data centres, to the conversion of office buildings into luxury hotels, and even selected residential areas, for which BF.direkt also leads club deals. “Many property loans in Germany became distressed mainly because several institutional investors financed projects with loan-to-value ratios of 95%, which makes no sense”, Sangermano added.
BF.capital is mulling for the launch of BF European Flexible Credit Fund I, a private debt fund of funds for which Italy may weigh for 10% of the portfolio and Germany for 25%. “The banking system is underserving Germany’s SMEs as very small businesses get financing from local banks, whose assets amount to a few billion euros, whilst larger institutions, such as the Volksbanken and Landesbanken, focus on companies with a turnover of 100 million euros or more. Private credit can therefore fill the gap in the middle ground”, Sangermano explained.
The target IRR of the Flexible Credit fund’s 10-year maturity is of 11% – 13% for a 1.5X cash multiple. The real estate lending fund will finance around 80% of new development projects whilst reserving only a fifth of its resources for existing assets. Such vehicle set a target IRR of 8%, with a loan-to-value ratio of up to 75%
