LBC Credit locks down $638m for debt fund

The fund originates floating-rate loans to North American mid-market companies.

LBC Credit Partners has pulled in $637.9 million for its Credit Partners IV Fund, nearing its 750 million offering target, according to a US Securities and Exchange Commission document released on Thursday.

The fund so far has 54 investors committed with a minimum investment of $100,000. No further details were disclosed.

LBC Credit declined to comment.

Credit Partners IV has commitments from the Minnesota State Board of Investment ($100 million), Alaska Permanent Fund ($100 million), City of Austin Police Retirement System ($20 million), and the Dallas/Fort Worth Airport ($20 million), PDI data shows.

The Philadelphia, Pennsylvania-based mid-market lender started fundraising for Fund IV in 2015, originally with a $1 billion commitment target, as Private Debt Investor reported.

The fund has a three-year investment period and a three-year harvest period with two one-year extensions, according to a Brazos River Authority February 2016 meeting recording. The fund will target a “low-teens” net internal rate of return by investing in secured loans.

The previous Credit Partners Fund III closed on $839 million in May 2014, exceeding its initial target of $650 million. The third fund charged a 1.35 percent management fee on invested capital and a 10 percent carried interest provision along with a 7 percent hurdle, according to documents from the City of Austin Police Retirement System. Credt Partners Fund III targeted a net return of 12-13 percent.

The first fund in the series launched in 2005 and closed on its initial target at $300 million.

LBC Credit provides mid-market senior, unitranche, second lien, junior secured and mezzanine debt and equity co-investments on both sponsored and non-sponsored transactions, according to its website. The firm’s financings usually support buyouts, acquisitions, growth strategies, recapitalisations, refinancing and restructurings.