Crestline raises $800m for latest senior debt vehicle

The firm also recently closed a $600m vehicle that finances late-stage private equity-style funds.

Crestline Investors blew past a target of at least $500 million for its latest direct lending vehicle, the firm said in a Friday statement.

The Fort Worth-based credit manager closed on $800 million of equity commitments for Crestline Specialty Finance Fund II, surpassing the $615 million total raised for Fund I. The firm was targeting between $500 million and $650 million for Fund II, according to investor documents for the San Bernardino County Employees’ Retirement Association.

The vehicle will focus on senior secured investments, including unitranche and second lien loans of $15 million-$100 million in lower mid-market or mid-market companies, according to the statement.

“The closing of our second direct lending fund is strong evidence of the continued mismatch between the current credit needs of these smaller businesses and the providers of credit in the market,” Crestline head of credit strategies Keith Williams said in a statement.

The firm also recently closed its initial Crestline Portfolio Finance Fund, which locked down $600 million of commitments.

It was the first commingled vehicle, though the firm has invested in the strategy through separately managed accounts and co-investments. The strategy will allow it to provide liquidity to investors via purchasing fund stakes and invest in mature private equity-style funds, meaning those that are past the investment and recycling periods and cannot make new follow-on investments.

The vehicle is the first commingled fund for the strategy, though the firm has invested in the strategy through managed accounts since 2016, according to last month’s announcement.

Fundraising for the year has been down significantly since last year, in which over $200 billion was raised. Through the first three quarters of the year, credit funds have raised $88.57 billion, according to PDI data. Senior debt has raised the most, with investors committing $34.83 billion to the strategy.