AlbaCore Raises €2.2bn for Its Third Private Lending Fund

AlbaCore Capital Group raised €2.2bn for its third private lending fund, hoping to capitalize on an area of the credit markets that has been booming this year.

The European credit specialist’s new flagship fund — which also holds €200m of leverage — invests in private deals such as leveraged buyouts as well as providing financing for companies when conventional debt market options are closed. It also buys debt in the secondary market where prices have become dislocated.

“I’m pleased with the level of commitments we’ve received for Fund III and the growth we’ve seen since our previous fund close,” said David Allen, chief investment officer at the €8.7 billion credit manager, in a statement seen by Bloomberg News. “Our focus remains being selective in our approach while leveraging our deep knowledge of the European market.”

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The $1.4 trillion private credit market has been thriving this year as rising interest rates, geopolitical turmoil and fears of recession have sapped investors’ risk appetite, forcing banks to pull back from underwriting new deals as they struggle to shift billions of dollars of debt off their balance sheets.

That’s made direct lending deals more attractive to companies, which have struggled to raise debt as traditional forms of leveraged finance — such as leveraged loans and high-yield bonds — have stumbled.

CVC Capital Partners this month raised €6.3 billion for its third fund targeting opportunities to lend directly to European companies, while other investment firms including Ares Management Corp. and Carlyle Group Inc. are also readying new private credit funds.

Source: AltAssets

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