They said it

“We would urge extreme caution in the CCC segment. Investors should take some duration and some credit risk, but too much of either is a recipe for disaster” 

John McClain, high-yield portfolio manager at Brandywine Global Investment Management, warns of the risks facing junk bonds

First look

Foresight backs Impact Lending with £75m facility
Impact Lending has secured a £75 million ($90.5 million; €88.4 million) debt facility from Foresight Group to expand its solution for sustainable and traditional build schemes.

Impact Lending is an arm of Impact Capital Group and provides development loans for building projects. It offers stretch senior, mezzanine and bridging finance focused on sustainability, driven by its ESG agenda, which addresses environment, housing, social cohesion and wellness concerns.

Oliver Bates, senior private debt manager at Foresight, said: “Alongside the highly experienced team at Impact Lending, we look forward to playing a role in addressing the UK’s housing crisis, made more pressing than ever in a post-covid environment, as well as supporting the government’s green recovery initiative through green loans.”

Impact Lending has developed a set of green criteria to evolve its sustainable loan range with clearly defined sustainability credentials, which it said will enable development projects to satisfy key aspects of sustainable development.

“With our new funding line of up to £75 million, our intention is to push our sustainable loans range forward with a view to seeing our green products overtake our traditional loans range in the very near future,” said Impact Capital Group’s founder and CEO, Robert Whitton. “This forms part of our long term mission to help address the great emergencies of our time and we are pleased to see the market is really gaining traction in this direction.”

Bain’s credit arm commits $2.4bn in H1 2022
US-headquartered investor Bain Capital Credit announced it has committed $2.4 billion in the first half of 2022 to support mid-market and private equity-backed companies as it steps up the pace of its credit activity.

The financing was spread across more than 100 businesses in 27 different industries and included refinancings, leveraged buyouts and add-on acquisitions for both new and existing portfolio companies. The latest investments bring Bain’s private credit group’s total to $19 billion across 450 portfolio companies since its inception in 1998.

Michael Ewald, managing director at Bain Capital Credit and global head of its private credit group, said: “Our strong sourcing network and diversified deal pipeline has allowed us to maintain our selectivity and discipline when choosing which new investment opportunities to capitalise on. We remain attracted to the core mid-market… as we believe this segment of the market represents a large and fragmented opportunity set.”

Bain said it served as lead lender on approximately 70% of its new investments and now has a portfolio of around 200 mid-market businesses and $9 billion of assets under management within its private credit group. It also closed more than $1.5 billion of new capital for credit investments.

Essentials

Fidelity CLO raises private credit AUM above $1bn
Fidelity International has launched and priced its latest CLO, Fidelity Grand Harbour CLO 2022-1 at €333.1 million, with Morgan Stanley acting as arranger.

The firm said the CLO is a significant milestone in its private credit business, which now has $1.1 billion of assets. Its previous CLO Fidelity Grand Harbour CLO 2021-1 was priced in November 2021 and both have ESG embedded into their investment processes.

Michael Curtis, head of private credit strategies at Fidelity International, said: “Reaching over $1 billion in assets under management within our private credit team is an important milestone for Fidelity, and a testament to the hard work put in across our growing team. By combining new resources with Fidelity’s robust fundamental research and sustainability framework, we are proud to be at the forefront in developing sustainable private credit capabilities, in line with growing investor demand.”

LP watch

Institution: Rhode Island State Treasury
Headquarters: Providence, US
AUM: $10.6 billion
Allocation to alternatives: 25.9%

Rhode Island State Treasury committed $30 million to Shamrock Capital Content Fund III, according to its 22 June investment meeting.

Rhode Island State Treasury administers and manages investments on behalf of the Employees’ Retirement System of Rhode Island (ERSRI).

Founded in 1978, Shamrock Capital Advisors is a Los Angeles-based investment firm that targets the media, entertainment and communications sectors across the US.

Rhode Island State Treasury has a 14 percent allocation to private equity, which comprises $1.5 billion in capital, which surpasses its target allocation of 12 percent to the asset class.

Today’s letter was prepared by Andy Thomson with John Bakie and Robin Blumenthal