Spanish fund of funds manager Altamar has reached a first close of €225m for its first private debt fund of funds after just one month on the road, Claudio Aguirre, chairman, chief executive officer and founding partner of Altamar told Real Deals.

With a target size of €350m to €400m, Altamar Private Debt I will be invested in between ten and 15 European funds. “We might consider investing in a fund that is not 100 per cent European, in a mixed fund, but in principle the focus is mainly European,” Gonzalo Verdera, chief strategy officer and managing partner of Altamar, says.

During the first stage, the fund of funds will invest in open senior loan funds until the direct lending funds in which Altamar has made commitments make their capital calls. At that point, the senior loan funds will be divested and the proceeds reinvested in closed direct lending funds. The debt fund of funds has a return objective of around five per cent and a time horizon of eight years.

Real Deals understands that the minimum commitment is €150,000, management fees stand at around one per cent of deployed capital and subscription fees are approximately 0.5 per cent of the committed capital.

The fund will be advised by Altamar Credit, a division created in January and headed by Jose-Maria Fernandez, former director general of the Spanish Treasury, and Rodrigo Echenique, former managing director at Banco Santander.

Altamar has also launched its first direct venture fund, with a target size of €100m to €120m. The fund will invest in seed, series A and series B rounds for ten to 12 Spanish start-ups operating in the life sciences sector – mainly biotech, genomic, medical instruments and diagnostics businesses. “It might be that we provide €2m or €3m and save capacity for the next rounds, or that it’s a pre-IPO investment and we invest €20m to €25m. In that sense, the capacity is quite broad because the team has done precisely that quite successfully in Silicon Valley,” Verdera says.

The team is led by Guy Nohra, one of Silicon Valley’s most successful venture capitalists in biotech. Throughout his extensive career, Nohra has taken more than 50 life sciences companies through to IPOs and in 2007 was named on Forbes’ Midas List. Alta Life Sciences has been labelled as a “bridge” fund, because it will help some of its Spanish portfolio companies go to Silicon Valley and might take Silicon Valley-based companies to Spain to take advantage of the reduced costs in the country. The ultimate objective is to float some of these businesses in the US.

The money for both funds is being raised through Altamar’s own internal fundraising department and without the help of placement agents.

International expansion

Founded in 2004 in Spain as a private equity fund of funds manager, Altamar first grew its investor base domestically, and then in Latin America. However, most of Altamar’s investments are in European funds outside of Spain. As the firm expanded over the years it has added different alternative assets to its offering, including funds of funds in real estate, infrastructure and venture capital. Within each strategy it makes primary, secondary and co-investments. The firm currently employs 120 professionals and has offices in Madrid, Barcelona, Santiago de Chile, Taipei and New York.

Altamar’s maiden private debt fund of funds and direct venture capital fund come to market as it seeks to expand its global investor base beyond its stronghold in Spain and Latin America, and the firm has made a number of high profile LP hires to help with the process. In November it appointed Monica Martinez as managing director in the global client solutions team to lead the international expansion of the firm. She joined from JP Morgan Asset Management in London where she served as head of international institutional sales and product strategy. In June it hired four senior advisers, including Maryfrances Metrick, the former head of investor relations at Centerbridge Partners and Blackstone, to increase the company’s efforts in the USA, Europe and Asia.

“Our objective is to be a boutique that generates alpha with very good client services, rather than a mega fund where customer support and proximity is more challenging,” Aguirre says. However, the firm has had to expand its offering of asset classes and gain critical mass in order to maintain that quality of service, Verdera says. “Our investors increasingly ask for more disaggregated and tailor-made information,” he says, adding that “the needs of institutional investors are very different from those of family offices or high net-worth individuals.”

The firm has had a strong track record for its private equity funds of funds. At the end of September 2016, Altamar Buyout Global, the 2006 vintage fund, had a multiple of 2.05x and net IRR of 10.7 per cent, putting it in the top quartile of private equity funds of funds raised in that year both globally and in Europe, according to Preqin.

Whether it can replicate this performance for its first private debt and venture capital funds remains to be seen.

Further reading:

Altamar closes private equity fund of funds at €500m hard cap