Cerberus raises more than $4.4bn for direct-lending strategy

The firm received $2.4bn in equity commitments and $2bn from SMAs to finance US middle-market companies across diverse industries.

Cerberus Capital Management said that its middle-market direct lending platform, Cerberus Business Finance, held a final close on more than $4.4 billion for its Levered Loan Opportunities Fund IV, including $2.4 billion of equity commitments and $2 billion raised from SMAs. The target wasn’t known.

The latest fundraise, launched in September 2019, brings Cerberus Business Finance’s total capital to more than $20 billion.

Fund IV’s commitments came from new and existing investors, including government and corporate pensions, sovereign wealth funds, endowments, insurance companies and others, Cerberus said in a news release. Although it didn’t name specific investors, data from Private Debt Investor show that Cathay Life Insurance of Taipei committed $30 million, and San Francisco Employees’ Retirement System committed $75 million.

Cerberus didn’t provide further details about Fund IV, but its predecessor, Cerberus Levered Loan Opportunities Fund III, topped its $1.5-2.0 billion target in 2017, raising $2.05 billion.

The close of Fund IV represents “the latest milestone” for Cerberus’ direct-lending platform, said Daniel Wolf, chief executive officer of Cerberus Business Finance. He said the firm has provided “premier financial sponsors and leading businesses” with “one-stop financing solutions”. Wolf added that the firm’s long-term clients sought it out for “certainty of transaction closure and terms, flexible capital structures and speed of execution”.

Cerberus Business Finance manages more than $16 billion of loans across more than 140 US middle-market companies. Cerberus Capital Management has approximately $50 billion in assets across complementary credit, private equity and real estate strategies.