Credit Firm Crescent Raises $6bn for Direct Loans to Smaller Companies

Private credit firm Crescent Capital Group said it raised a total of $6bn to lend directly to smaller to midsized companies.

The money raised includes $3.2bn in equity commitments on a final close of its third direct lending fund, plus $1bn in targeted leverage. It’s also receiving $1.8bn from separately managed accounts that will invest alongside the fund.

The booming private-lending market has been raising vast amounts of money in recent years from investors looking for higher returns. In 2021, the funds raised a record record $195bn, according to financial research firm Preqin.

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The equity Crescent raised for the vehicle titled Crescent Direct Lending Fund III exceeded the firm’s initial target by more than $1bn. The previous version of the fund closed in 2018 and raised $1.6bn in equity commitments. Investors in the fund include a mix of pension funds, insurance companies, financial institutions, family offices and endowments.

So far, Crescent has invested $1.6bn from the fund. Its strategy is to invest in loans to companies backed by U.S. private equity firms, debt that can be as big as $150 million to $200m, according to the statement.

Crescent’s direct lending business focuses on companies that generate between $5m to $35m of a form of income known as earnings before interest, tax depreciation and amortization. Loan proceeds typically fund leveraged buyouts, add-on acquisitions, refinancings and recapitalizations.

Source: Bloomberg BNN