Steadfast Capital Markets Group has reached a deal with Alcentra NY LLC to launch a direct lending credit fund, called Steadfast Alcentra Global Credit Fund. The fund will back private middle-market companies in the U.S. and Western Europe.
Direct investments of the Steadfast Alcentra Global Credit Fund will be sourced and actively managed by Alcentra. As part of the deal, Steadfast will serve as sub-adviser for the fund’s investments. The fund will offer up to $3 billion in shares of common stock, using the proceeds from the fund’s offering to provide custom financing structures to lower middle-market and middle-market businesses. The fund will also provide debt structures in the form of floating and fixed-rate senior secured loans, second lien loans, subordinated debt, and some minority equity investments.
"Financial regulations introduced in the United States and Europe in recent years have resulted in constrained traditional bank lending to middle-market companies, providing a growing opportunity for alternative direct lenders such as Steadfast Alcentra Global Credit Fund," states fund CEO Christopher Hilbert.
Alcentra, a subsidiary of BNY Mellon (NYSE: BK), is a New York-based asset management and investment boutique focused on debt capital markets in the U.S. and Europe. Dating back to 1998, the firm manages sub-investment grade credit with $31.5 billion of assets under management across more than 75 investment structures. Alcentra invests between $5 million and $30 million per transaction in the healthcare, business services, defense, and government services sectors. The firm has additional offices in Boston and London.
Steadfast is an Irvine, California-based affiliate of Steadfast Companies. The company was formed in 2009 to offer real estate-related investment options through retail broker-dealers. Steadfast Companies, founded in 1994, owns and manages approximately $5.4 billion in total assets. Since the parent company’s inception, Steadfast Companies has backed 46 private and public investment programs.
Debt financing is in full-swing as middle-market M&A has proved to be a healthy market for lenders. Other fund-related deals and capital raises include: Private Advisors’ closing its fourth co-investment program; CVC Capital Partners’ $18 billion fund to target U.S. and European investments; the Riverside Co.’s first minority investment fund in April 2017; The Carlyle Group’s (Nasdaq: CG) fourth distressed capital raise; Vector Capital’s fifth PE fund; Monroe Capital LLC’s $800 million credit fund; and NXT Capital LLC’s fourth debt fund with $900 million. In 2016, the Carlyle Group (Nasdaq: CG) closed its fourth CLO fund at $507 million and Littlejohn's Wellfleet closed a $406 million fund.