Babson collects $2bn for global lending strategy

The money came in from several different types of institutional investors across 11 countries.  

Babson Capital Management has gathered $2 billion on its global private loan strategy, PDI understands.

The firm, which was initially raising $750 million for a Global Private Loan fund, also collected capital including mandates to a commingled fund and separate accounts.

The split between fund money and separate accounts could not be learned and Babson declined to comment.

The strategy garnered commitments from a diverse set of investors globally, sources told PDI. The investors were understood to be split among 11 countries and included public and corporate pension funds, insurance companies, endowments, foundations, sovereign wealth funds and family offices.

The global private loan strategy focuses on senior loans to sponsor-backed mid-market companies. It targets companies with EBITDAs of $10 million-$50 million and invests in the US and Europe, as well as in developed Asia, including Australia and New Zealand, where few other US-based private debt managers play.

Eric Lloyd, who leads global private finance, and Terry Harris, head of portfolio management for global private finance, are the two senior co-portfolio managers on the strategy, which seeks a return premium over the broadly syndicated loan market. Lloyd and Harris are based in Charlotte, North Carolina.

The direct lending strategy employs bottom-up fundamental analysis and targets a diverse set of industries, although it tends to avoid energy investments and does not play in the real estate space.

Babson’s global private finance business also runs mezzanine strategies in regionally focused funds in the US, Europe and Asia. Babson has $3.8 billion of invested capital in direct lending. Its private credit business overall has $30 billion in assets under management, of which about $19 billion is in corporate private placements and $6 billion is in infrastructure debt.

The firm also has a large broadly syndicated loan platform that handles $54 billion in high-yield assets. Overall Babson’s AUM are at $231 billion across a variety of credit, equity, alternative and real estate products. Babson is part of the MassMutual Finance Group insurer, which also owns other asset management subsidiaries.