Marathon raises $1.3bn for ABL fund

Second close of third vintage fund beats its target and nears its hard-cap.

Marathon Asset Management has held a second close on its Secured Private Strategies Fund III on $1.3 billion, beating its target, Private Debt Investor has learned.

The asset-based lending fund, which began receiving commitments in March 2022, surpassed its $1.25 billion target. It has a hard-cap of $1.5 billion to $1.6 billion, according to a  source familiar with the matter.

Marathon declined to comment. But the source said the fund will make senior secured, asset-based loans with a target size of $25 million to $100 million.

There will be no leverage at the fund level, the source said, adding that the fund has a target internal rate of return of 10-12 percent. Like its predecessor fund Marathon Secured Private Strategies Fund II, which held a final close on $896.1 million in 2020, the latest fund has a hurdle rate of 8 percent and carry of 20 percent, per PDI research.

Both funds have a duration of six years and a three-year investment period, and each has received a $100 million commitment from the Minnesota State Board of Investment, per PDI R&A. Fund II achieved an IRR of 16.31 percent, according to data from the Minnesota State Board of Investment.

Marathon Asset Management, based in New York, has $20 billion of assets under management.