Exclusive: Babson eyeing first global direct lending fund

The US-based firm is in the early stages of arranging a new mid-market focused credit fund.

Babson Global Private Finance has held early stage discussions with LPs about a new direct lending fund, a source familiar with the situation told PDI. The planned fund, Global Private Loan Fund, could target between $500m and $750m, the source added.

Babson declined to comment on the potential fundraising.

The fund would be Babson’s first direct lending vehicle. Its previous funds have focused on mezzanine strategies in specific regions, according to data compiled by PEI Research.

The firm has not begun formally marketing the credit vehicle, the source said.

It plans to target opportunities through which it can deploy capital via senior secured financing for middle market companies in North America, Europe and Asia-Pacific, continued the source.

Babson has 34 employees globally dedicated to originating private debt and typically invests between $10 million and $75 million in each transaction, according to its website.

Babson’s mid-market credit arm recently rebranded from Babson Capital Finance to Babson Global Private Finance and is separate from the high-yield loan business which focuses on the broadly syndicated loan market. The unit is led by chief executive officer, Eric Lloyd, formerly of Wells Fargo and Wachovia.

Babson Capital is owned by US insurer MassMutual Financial Group and is headquartered in Charlotte, North Carolina.

The firm had over $206 billion in assets under management, as of 30 September 2014.