Antares Capital is in talks with third-party institutional investors about forming strategic partnerships, PDI can reveal.
Tim Lyne (pictured), senior managing director at Antares, told PDI that the US mid-market lending firm has been holding discussions with sovereign wealth funds, insurance companies and pension funds, among others, about working together on unitranche and senior credit deals on a recurring basis.
Antares is already close to sealing one such partnership, although Lyne could not confirm the identity of the institution involved yet. He also declined to comment on the fees Antares would charge investors.
Lyne said Antares had brought in clients in a similar way when it was part of General Electric, but now it has four people dedicated to business development and sourcing institutional relationships such as these. They are senior credit and underwriting professionals recently transferred to these roles.
Antares also has seven staff focused on investor relations and account servicing who can monitor these portfolios once they are formed. This team will also work on CLOs when Antares starts issuing them.
The firm says the arrangement will provide institutions looking for exposure to the market a well-entrenched lending platform, while Antares will have a stable of partners with which to work on deals.
Antares usually leads large deals, syndicates parts of them down and holds the biggest slice. Under the new arrangement it would have its syndicate lined-up ahead of the deal. “It’s a way of pre-syndicating now versus syndicating later,” Lyne said. It would also give the sponsors “certainty of execution”.
Lyne said he could bring in five to 10 partners on a deal.
“We work with each investor to establish criteria that reflect their investment appetite,” Lyne added, noting that investors had confidence in Antares’ team because they had been working on mid-market loans for 25 years.
“We believe we're seeing more deals in the middle-market than anyone else and are highly selective on which ones we actually want to do,” he said.
Antares primarily focuses on senior and unitranche investments, targeting sponsor-backed transactions and companies with $7 million-$125 million EBITDA. In its unitranche deals, which Antares works on with LStar Capital in its Middle-Market Direct Lending Programme, Antares underwrites up to $500 million and holds up to $300 million, according to its website. LStar is the direct lending affiliate of Lone Star Funds.
Antares has about $11 billion in capital management, including leverage. The firm is based in Chicago, with additional offices in New York, Los Angeles, Atlanta, Norwalk and Toronto. The firm was acquired by CPPIB from General Electric in August.