BlueOrchard and IFC seek $2bn for emerging market private debt fund

BlueOrchard and the International Finance Corporation are seeking $2bn (£1.5bn) for an emerging market private debt fund that took $300m at first close, anchored by Tokio Marine Group. Alternative Credit Investor reported the launch on 9 October.

The fund is evergreen, allowing investors to subscribe and redeem on an ongoing basis subject to predefined redemption windows, with capital continuously recycled into new investments, the firms said.

The $300m first close is 15% of the $2bn target and sits within the IFC's Managed Co-Lending Portfolio Program, launched in 2013. Alternative Credit Investor reports the program has more than $25.5bn in capacity.

“Emerging markets need trillions of dollars to invest in their development, far more than public finance can supply,” said Makhtar Diop, managing director of the IFC. He called the initiative “a scalable way to connect institutional capital with businesses that create jobs, expand opportunities and improve lives in the places that need it the most.”

Institutional investors are showing growing interest in emerging market private credit, according to Alternative Credit Investor. BlueOrchard and the IFC said emerging market debt has strengthened significantly over the past two decades, supported by improved regulation, stronger governance and falling default rates.

The report links to an earlier BlueOrchard vehicle, a climate-focused private debt fund that raised $250m. PCD's September coverage of a BlueOrchard first close argued that what was being sold was the tranching rather than the emerging-market loan book, with subordination from development finance institutions underneath it due to be tested at second close.