NXT Capital locks down largest fundraise yet

Senior Loan Fund V is levered with a credit facility provided by Wells Fargo Bank.

NXT Capital has reached a final close on its fifth flagship fund, surpassing its original $350 million target and exceeding the vehicle’s predecessor by more than $100 million, the firm said in a Monday statement.

The Chicago-based mid-market lender collected $415 million in equity commitments for Senior Loan Fund V, and, when leverage is included, will have $1.2 billion in deployable capital. The vehicle will invest in senior and unitranche debt in mid-market companies backed by private equity sponsors. As of September, the firm had raised $402 million in an interim close, a source had told PDI.

NXT, which declined further comment, had set a target of $800 million-$1 billion for Fund V, which was launched this year, Private Debt Investor previously reported. The fund series’ prior incarnation, Fund IV, closed in October 2016 on $912 million of deployable capital, consisting of $312 million in equity commitments and a $600 million leverage facility.

Fund V, NXT’s largest vehicle to date, received a $125 million commitment from the Teachers’ Retirement System of the State of Illinois in June.

Additional equity contributions came from institutional investors both within the US and abroad, including public and private pension plans, insurance companies, foundations and other asset managers, the company said in its announcement. Wells Fargo Bank is the administrative agent for the vehicle’s syndicated credit facility.

Past SLF vehicles have sought returns between 6-7 percent without leverage and 9-11 percent with leverage, according to investor documents previously obtained by PDI. The funds also have a 0.75 percent management fee levied on the fund’s assets under management.

Led by chief executive officer Robert Radway (pictured), NXT provides financing to mid-market companies and commercial real estate investors. It is a portfolio company of private equity firm Stone Point Capital. It has offices in New York; Los Angeles; San Francisco; Dallas; Atlanta; Charlotte, North Carolina; Nashville, Tennessee; Phoenix, Arizona; and Stamford, Connecticut.