Pemberton hits $1bn milestone for working capital finance

Pan-European credit investor Pemberton has secured $1 billion for its working capital finance strategy.

The open-end strategy is targeting assets under management of $10 billion over five years, and sources close to the firm say it expects to have around $2.5 billion by the end of 2023.

Working capital finance allows institutional investors access to short-term credit by investing in receivables, payables and inventory financing for large and mid-market companies in both the US and Europe.

Loans are typically of a duration of between three and four months allowing an open fund structure with monthly, quarterly and half-yearly liquidity. Pemberton said the strategy is a good diversifier for LPs who want exposure to private credit without being locked into a fund for long periods of time. It says the fund offers stable NAV and strong returns compared to traditional liquid fixed-income strategies.

The WCF team at Pemberton consists of 10 senior professionals responsible for sourcing, structuring and underwriting, and expects to grow its mid and junior level team as its AUM increases.

Mark Hickey, head of WCF at Pemberton, said: “This milestone demonstrates growing LP interest in working capital finance and its ability to offer compelling returns in volatile market conditions. We believe non-bank capital will play an increasingly important role in short-term corporate financing.”

According to research by PwC, use of working capital by corporates increased by 17 percent to €5.4 trillion in 2021 and is forecast to continue to grow in the coming years. While bank capital remains dominant in this area, Pemberton believes there is an opportunity for non-bank lenders in areas that are currently underserved by the banking sector.