TIAA’s investment manager Nuveen and its affiliate Churchill Asset Management, have created a new business development company, the Nuveen Churchill Private Capital Income Fund, with an income and total return focused strategy investing primarily in mid-market senior loans and junior capital.

One differentiating characteristic of PCAP is its allocation to private equity co-investments, which provides rare access to direct dealflow, the firms said in a news release.

Expanding on this point, a spokesperson for Churchill said that a “majority of BDCs typically focus on senior lending, while some have flexibility for junior capital”. The new BDC offers both of those, along with “hard-to-source private equity co-investments,” a further expansion of flexibility “to remain selective and choose the best of the best deals,” the spokesperson added.

PCAP begins life with an investment portfolio of approximately $350 million, including a commitment of more than $250 million from TIAA.

In a statement, Mike Perry, head of Nuveen’s global client group, said that PCAP will offer eligible individuals access to investments in the US mid-market that typically have been offered only to institutions and that are well adapted to an inflationary and rising-rate environment.

Four months ago, Nuveen acquired a controlling interest in Arcmont Asset Management, a London-based private debt manager. As it observed at that time, Europe-focused Arcmont offered synergies with North America-focused Churchill with very little overlap

The president and chief executive officer of Churchill, Ken Kencel, said: “The middle market stands out as one of the most vibrant, appealing sectors in the US economy, with a large target universe of companies poised for private capital investment.”

Churchill, the investment-specialist affiliate of Nuveen, has offices in New York; Charlotte, North Carolina; Chicago; Dallas; and Los Angeles. It provides customised financing to mid-market private equity firms as well as their portfolio companies, across the capital structure.