Crescent closes second direct lending fund on more than $1.6bn

The fund is already nearly halfway deployed, with $750m of capital invested at the time of the final close.

Crescent Capital Group has closed its second direct lending fund well above its $1 billion target.

The firm announced Thursday that Crescent Direct Lending Fund II held its final close with more than $1.6 billion in committed capital, marking its largest direct lending vehicle thus far. The vehicle will invest in US-based mid-market companies with  EBITDA between $5 million and $35 million.

The fund is nearly halfway deployed already, with over $750 million committed across 20 new companies in addition to existing platform companies. The fund is targeting 7-9 percent unlevered net asset returns, according to documents from the City of Fresno Retirement Systems.

The firm did not respond to a request for comment by press time.

Crescent’s direct lending strategy focuses on senior secured loans to private-equity backed lower mid-market companies. The firm also offers revolving credit facilities, term loans, delayed draw term loans, second lien loans and unitranche options.

The firm’s direct lending strategy doesn’t focus on any specific sector, but business services, environmental industries and consumer goods and services make up the biggest portfolio percentages, according to the pension documents.

The fund attracted global limited partners, according to the press release, which included many large US pension funds.

The New Hampshire Retirement System re-upped its investment of $50 million from Fund I to Fund II. The Connecticut Retirement Plans and Trust Funds committed $75 million and the Texas County and District Retirement System committed $225 million.

Fund I closed in September of 2015 with $602 million in commitments. The fund is looking at 11.4 percent levered returns and is currently 80 percent deployed, according to the COFRS documents.

Crescent is also currently raising its second European-focused direct lending fund, which is targeting an undisclosed amount.

Crescent is a Los Angeles-based capital investment firm. The firm began its direct lending strategy in 2005 and has since loaned over $4 billion to various companies. The firm currently has $24 billion in assets under management.