Middle-market lender Antares Capital has raised just over $3 billion for its latest credit fund, which will focus on providing financing to mainly mid-sized private equity-backed companies.

The vehicle, which held its final close this week, raised cash from sovereign wealth funds, public and private pensions, asset managers, banks and insurance companies, according to head of asset management Vivek Mathew. The fund, which attracted institutional investors from the U.S., Canada, Asia and the Middle East, exceeded its $1.5 billion target, Mathew said.

“The investment strategy mirrors our core investment strategy, which is to build a diverse portfolio of sponsor-backed first-lien secured loans to primarily U.S. and Canadian borrowers,” Mathew said in an interview.

The vehicle’s close comes as fundraising in the $850 billion private credit universe rallied in the second quarter, buoyed in part by appetite for opportunistic and distressed strategies. Investors have also been lured by juicy yields in the rapidly growing market.

“When it comes to private credit, it offers stable returns, it offers steady yields,” said John Graham, who oversees credit for Canadian pension giant CPP Investments, which purchased Antares in 2015. “I think equally important is a real recognition that the manager can drive added value and excess return through portfolio management, through security selection and through being actively engaged with the borrowers.”

Mid-sized companies and their private equity backers are likely to find the flexibility of private credit even more appealing amid the uncertainty caused by the Covid-19 pandemic, according to Graham. “At the end of the day, there is a large, scalable opportunity set there,” he said.

Antares, headquartered in Chicago, had $28 billion in capital under management as of June 30, and closed about 300 deals in 2019, according to its website.

Source: Bloomberg 

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