Antares Capital Advisers has held a final close on its inaugural senior loan fund on $3 billion, double the initial target of $1.5 billion.
The fund, which launched in December 2019 before covid-19 spread in the West, closed on 14 September and will be focused on sponsor-backed companies in the US and Canada, a spokeswoman said.
The fund’s investment objective is to build a diverse portfolio of sponsor-backed senior secured loans with US and Canadian borrowers, the firm said in a statement. The spokeswoman added Antares has implemented a variety of measures to demonstrate alignment of interest with investors.
The closing of Antares Senior Loan Fund, or SLF, is “a significant milestone” in the firm’s efforts to continue to diversify its investor base, and its ability to do so in the current environment is “a clear testament to the strength of the Antares brand”, Vivek Mathew, senior managing director and head of asset management, said in the statement.
SLF raised capital primarily from public and private pensions, insurance companies, asset managers and banks located primarily in the US, Canada and the Middle East, the spokeswoman said. She declined to disclose specific investors.
David Brackett, CEO of Antares Capital, the parent of Antares Capital Advisers, said in the statement that covid-19 “has been a stress test for our asset class, and while the story is not fully written yet, it appears that middle-market private debt will perform well”. As a result, Antares anticipates “further growth” in its asset management platform.
Perhaps one of the biggest shifts within Antares over the past few years has been the growth and evolution of its asset management capabilities, the spokeswoman said. The asset management team currently manages $18 billion out of Antares’ more than $28 billion of capital under management and administration. This positions the firm to take on more as it continues to build its bench of products, and to be nimble in partnering with its various stakeholders, she said. The platform complements Antares’ core business by allowing for larger commitments to transactions.
The average commitment for SLF will typically range from $30 million to $50 million, the spokeswoman said, adding that although mid-market is defined differently everywhere, Antares will generally be looking at companies with EBITDA of between $10 million and $100 million. The fund has both unleveraged and leveraged sleeves, and the equity commitments alone are just under $1.9 billion.
She added that very little capital was allocated pre-covid, although the leverage was already obtained, and thus the fund is “very well positioned” to take advantage of this “very attractive” lending environment.
Antares doesn’t disclose fees or target returns, but the spokeswoman noted Antares invests alongside its investors in all of its deals. Brackett told Private Debt Investor earlier this month that deal terms are “very attractive” compared with those pre-covid, with deals down around a turn of leverage, and pricing for traditional first-lien senior debt up anywhere from 75 to 125 basis points. Although terms are not dramatically improved, Brackett said there are fewer adjustments and addbacks.