Marathon holds first close on ABL fund at $850m

Marathon Asset Management held a first close on more than $850 million for its third asset-based lending fund, raising two-thirds of its $1.25 billion target, Private Debt Investor has learned.

The capital raise for the fund, Marathon Secured Private Strategies Fund III, includes a $25 million commitment from the general partner, according to materials obtained by PDI. In addition, Minnesota State Board of Investment has committed $100 million to the asset-based fund, per PDI research.

Marathon declined to comment on the fundraise. But the materials obtained by PDI show that the fund, launched in 2021, is set to begin deploying the capital on 1 April, and that the strategy’s near-term pipeline exceeds $2 billion of opportunities, generally in senior secured instruments across healthcare loans and royalties, transportation loans and leases, residential mortgage loans, consumer loans, corporate asset-based lending, and commercial real estate markets.

The strategy has historically provided lower volatility and correlation compared with the liquid credit markets, according to the materials. Marathon’s 2019 Secured Private Strategies Fund II raised about $900 million and had a net internal rate of return of 20 percent, while 2014’s MSPS I garnered $370 million of commitments and had a net IRR of 10.6 percent, according to the documents.

Marathon is a New York-based manager with $23 billion of assets under management as of 31 July.