Madison Capital raises sixth CLO fund amid debt fund popularity
Madison Capital Funding LLC has closed its sixth collateralized loan obligation (CLO) fund with $325 million in capital commitments. The firm’s new fund comes amid a healthy fundraising climate, particularly for lenders raising CLO funds due to its stable, cost-effective, and well-protected structuring.
The fund, called MCF CLO VI LLC, will have a reinvestment period of nearly five and a half years. Chicago-based Madison Capital, a subsidiary of New York Life Insurance Co., serves as the originator and collateral manager for the fund.
Founded in April 2001 as the middle-market lending arm of New York Life, Madison Capital has invested more than $26.2 billion in net funded commitments in more than 997 financing transactions. The firm currently manages more than $8 billion in assets for New York Life and other clients.
Since 2012, the middle market is continuing to see the resurgence of debt funds, particularly CLOs, as a stable investment vehicle for fund managers and investors. The revival comes as lenders, and the dedicated lending arms of private equity firms, have embraced the multi-tranche structure. Firms raising CLO funds include: Antares Capital closing the firm’s first CLO fund in May with nearly $2.1 billion in backing; the Carlyle Group (Nasdaq: CG) raising $1.2 billion in capital across two CLO funds this year; Trinitas Capital Management LLC raking in $717 million for the firm’s sixth CLO since going to market in 2016; and Wellfleet Credit Partners closing a $406 million CLO fund to back middle-market businesses using senior secured loans.