News & Analysis

LBC fund reaches $314m interim close

The Philadelphia-based lender has reported continued progress towards its $600m goal in fundraising for its fourth Credit Partners fund.  

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LBC Credit Partners has raised $314 million for its Credit Partners IV fund, according to an SEC filing shown Friday (29 July). The fund's target is $600 million, despite having been previously rumoured to be as high as $1 billion.

An LBC representative did not return calls seeking further detail on the fund by press time.

In May, an SEC filing showed that the fund had raised $180 million after beginning sales on 28 April. The previous fund in the series, LBC Credit Partners III, closed on $839 million in May 2014, exceeding its initial target of $650 million.

According to the filing, LBC is working with CV Partners and Acalyx Advisors to gather commitments for the fund, which has enlisted 67 investors thus far. 

Credit Partners IV has garnered commitments from the Oklahoma Police Pension and Retirement Board , the Brazos River Authority and reportedly the City of Austin Police Retirement System. In addition, the Pennsylvania Public School Employee Retirement System (PSERS) created a separately managed account to invest alongside Credit Partners IV.

According to PSERS documents outlining the strategy, Credit Partners IV will seek to make about 50 investments ranging in size from $10 million to $50 million.  Maturities on loans offered from the fund are likely to vary between three and seven years to be made to companies with typical revenues of less than $750 million and EBITDA of between $5 million and $50 million, according to the documents.

“LBC stresses cash flow sustainability and proven business models when selecting borrowers and prefers secured debt to unsecured debt and equity,” the document read. “While their strategy is industry agnostic, LBC avoids service companies with low competitive barriers and tends to avoid the retail, general distribution and real estate sectors.”

LBC is a mid-market lender based in Philadelphia that offers senior, unitranche and mezzanine debt, as well as equity co-investments. The firm has about $2.2 billion in capital commitments and maintains additional offices in Chicago and Greenwich, Connecticut.