News & Analysis

Adams Street nears halfway mark in $750m fundraise

Among the investors in the vehicle are a Texas pension fund and a life insurance business.

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Adams Street Partners has raised $365.39 million for its debut private debt fund, according to Securities and Exchange Commission regulatory filings.

The Chicago-based firm is seeking $750 million for its Adams Street Private Credit Fund. Investors in the fund include the Texas Municipal Retirement System, which is a founding investor for the vehicle, contributing $200 million to the vehicle, meeting minutes showed. In addition, Amica Life Insurance Company committed $9 million, documents from that company revealed.

Adams Street also has a $200 million leverage facility it is using alongside the fund’s equity commitments, according to a source familiar with the matter. The firm has been actively fundraising for a little over a year, this person said.

Kalorama Capital and Equus Financial Consulting are serving as placement agents on the fundraise.

A firm representative declined to comment.

The vehicle focuses on investments across the capital structure, from senior debt on down to preferred equity, in private equity-backed companies. The fund is targeting net returns of 10-12 percent, according to a March 2017 presentation to the Ventura County Employees’ Retirement Association.

The vehicle also charges a management fee of 1.5 percent on invested capital and a carried interest of 15 percent over a 7 percent hurdle rate, the firm’s SEC registration brochure showed.

Adams Street launched its private credit business in January 2016 when it added Bill Sacher and Shahab Rashid, formerly of Oaktree Capital Management. They have since hired six other investment professionals for their credit group.

The fundraise comes as senior debt funds remain the largest fundraisers over the first quarter. Investments for funds focused on the top of the capital structure consisted some $12.69 billion of the $35.14 billion raise with 11 fund closes. Distressed debt was not far behind with $12.21 billion, although $7.12 billion of that came from the GSO Capital Solutions Fund III.