Lone Star Funds has pulled out of its Middle Market Growth Programme joint venture, an endeavour that has existed in its current form for less than 18 months.
The effort between Antares Capital and Lone Star Funds, which provided unitranche financings of up to $350 million, has ended, both firms confirmed. The programme currently has 16 borrowers and almost $2 billion in assets, Antares spokeswoman Carol Ann Wharton said.
Recent deals included a March investment to support the Littlejohn & Co.’s acquisition of Tidel, which provides robbery-deterrent products to retailers, and a February investment in Calera Capital’s buyout of trucking company Evans Network of Companies.
Antares will still support the outstanding loans, Wharton explained, but is examining its plans for the role going forward when asked how the joint venture would be wound down. She added Antares would still do unitranche loans through its own balance sheet or in tandem with institutional investors or other asset managers.
Lone Star declined to comment.
The MMGP itself was launched in 2014 between Lone Star and GE Capital, which has since been dissolved after facing additional regulatory scrutiny due to its former federal status as a “systemically important financial institution”. Canada Pension Plan Investment Board bought Antares in June 2015, with the latter resurrecting the partnership with Lone Star Funds in January 2016. PE Hub first reported the news.
GE sold Antares to CPPIB in a transaction valued at $12 billion. Toronto-based private equity firm Northleaf Capital took a minority stake in Antares in November, the same month Northleaf launched its private credit arm.
Antares – which participates in transactions involving a private equity sponsor and has six offices between the US and Canada – also recently expanded its strategies to include collateralised loan obligations, a business it exited over a decade ago. The firm closed the $2.1 billion deal, arranged by Deutsche Bank Securities, last Thursday.
Founded in 1995, Lone Star Funds and credit affiliate LStar Capital invest in corporate and real estate debt as well private equity. It has 12 offices among the US, Bermuda, Europe and Asia.
Editor's note: It was Lone Star Funds that backed away from the MMGP, not Antares as an earlier version of the article stated.