Wellfleet Credit Partners, the credit advisory division of private investment firm Littlejohn & Co., has raised a collateralized loan obligation (CLO) fund with $557 million in capital commitments. The fund, called Wellfleet CLO 2017-2, is the firm’s second CLO of the year.
Proving their ability to deliver favorable returns and minimal defaults even through the recession, CLO funds have resurfaced as lucrative investment vehicles for the private debt world. The resurgence of CLOs across the middle market backs the notion that this managed, multi-tranche investment vehicle is indeed working for both fund managers and investors. Antares Capital raised its first CLO fund; The Carlyle Group LP (Nasdaq: CG) has closed two CLO funds; and Trinitas Capital Management LLC closed the firm’s sixth CLO.
With the closing of the new fund, Wellfleet now has more than $2 billion in assets under management. Wellfleet CLO 2017-2, which received investments from new and existing investors, is backed by a diversified portfolio of broadly syndicated senior secured loans. The fund is the firm’s fifth CLO in two years. Wellfleet CLO 2017-2 will have "a two-year non-call and a four-year reinvestment period with a final maturity of 12 years," according to the firm.
“We believe favorable credit market conditions coupled with our deep management team will allow us to maintain our investment style and portfolio construction strategies to create new CLO vehicles,” states Wellfleet portfolio manager Dennis Talley.
Based in Greenwich, Connecticut, Littlejohn invests in middle-market companies seeking a change in capital structure, strategy, operations or growth. The private investment firm, which has more than $5 billion in assets under management to date, launched Wellfleet in 2015. Citigroup Global Markets (NYSE: C) served as the arranger for the new CLO, while Dechert LLP acted as legal counsel to Wellfleet.