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Marshall Investments targets $100m for second growth credit fund

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And lastly, the fund’s mandate allows it to invest up to 15 per cent of its total haul in direct equity of growth businesses.

The fund-raising documents said Marshall Investments had already warehoused two deals for the second fund, which were producing income.

Also on display were returns from the firm’s past growth credit investments.

The firm made 17.7 per cent net IRR from a $12.5 million loan to home improvement marketplace hipages after its listing. A $2 million loan to marine safety manufacturer Vesper Marine for product development generated 16.4 per cent net IRR two years later in December 2021, when the business was sold.

The firm started writing “growth credit” loans in 2018, via its decade-old structured debt investments arm (officially called the Growth Capital Partners and Property Capital Partners), which has invested $400 million-odd for co-investors across more than 70 deals. The historical average return for co-investors has been 15 per cent on an IRR basis.

The first growth credit fund ended up lending to 11 companies and was generating 10.4 per cent annualised yield (paid out quarterly). Its individual loans were between $2 million to $10.5 million. All of them were senior secured and typically on a three-year amortising basis.