Commercial financing company NewStar Financial Inc. (Nasdaq: NEWS) has formed a new managed credit fund.
The fund, NewStar Arlington Fund LLC, will invest in middle market commercial loans that NewStar originates. It will also provide additional lending capacity to lead transactions for clients.
NewStar is planning to employ leverage through warehouse and securitization financing to generate returns for fund investors. The fund’s investment subsidiary has a $175 million credit facility with Wells Fargo Bank NA as a Class A lender, and NewStar as a Class B lender.
Boston-based NewStar focuses on financing companies and private investors in the middle market.