Amid the economic turmoil created by the coronavirus pandemic, New York-based fund manager Churchill Asset Management has held a final close on its Churchill Middle Market Senior Loan Fund II, raising $2 billion in commitments, double its original target of $1 billion.
Churchill’s final close comes as secondary prices in the broadly syndicated lending market are falling to levels last seen in July 2009, during the depths of the global financial crisis, according to the US debt advisory practice at Livingstone. It cautions that new dealflow has essentially evaporated, and it cited four separate instances of lenders pulling term sheets previously issued in support of acquisition financings.
Nevertheless, originators at private debt funds and commercial banks continue to look for deals, albeit with higher credit quality, higher pricing, tighter terms and details of the impact of the recent market disruption. Private credit funds are sitting on more than $250 billion of committed capital, Livingstone said.
Churchill’s fund, an unlevered vehicle that invests in traditional senior and unitranche loans to private equity sponsor-backed mid-market companies in the US, is the firm’s second since it became an affiliate of TIAA/Nuveen in April 2015. The first fund, Churchill Middle Market Senior Loan Fund, closed on $1.1 billion in commitments in November 2017. That vehicle more than doubled the expected $500 million and maximum $600 million that had been outlined in a Miami Beach Employees Retirement Plan memo that briefed the pension fund on a meeting with the firm.
Churchill’s latest fund attracted equity commitments from a diverse base of institutional clients globally, based in Europe, North America and Asia, the firm said in a news release.
It declined to provide any other details.
Churchill now manages nearly $23 billion of committed capital. It has funded nearly $13 billion of mid-market senior loans to private equity sponsors.