Sixth Street’s second European direct lending fund closes on €1bn

The San Francisco-headquartered investment firm hit the hard-cap for the vehicle, which follows an €800m predecessor.

Sixth Street has officially announced the final closing of its second European direct lending fund, which closed at the end of 2020, on €1 billion. The Specialty Lending Europe II vehicle hit its hard-cap and is larger than its €800 million predecessor, SLE I.

The fund is focused on financing solutions for mid-market companies but can also do larger deals in tandem with Sixth Street’s $24 billion tactical opportunities cross-platform investing strategy. The first European fund originated more than €3 billion in financings.

San Francisco-headquartered Sixth Street opened a London office in 2011 and expanded its Specialty Lending strategy from the US to Europe in 2015. The strategy is led in London by partner Mike Griffin, who joined the firm in 2011 from Golub Capital.

Griffin says the firm has done deals in nine European countries since the strategy was launched into the region. Companies backed by the firm include the likes of German digital solutions firm Easy Software and Swedish spend management solutions provider Medius.

Sixth Street, which has more than $50 billion in assets under management, has eight investment platforms: TAO, growth, opportunities, specialty lending, fundamental strategies, infrastructure, agriculture and credit market strategies.

In addition to direct lending, the firm covers the likes of life sciences royalty financing, retail asset-backed lending and bespoke debt and equity capital solutions. In the US, its Sixth Street Specialty Lending business development company, which focuses on mid-market lending in North America, delivered total returns of 9.8 percent in 2020.

The firm’s European direct lending business was previously known as TPG Specialty Lending Europe before Sixth Street and TPG, the California- and Texas-headquartered investment firm, agreed to become mutually independent in May last year.

As well as San Francisco and London, Sixth Street also has offices in New York, Dallas, Houston, Boston, Hong Kong, Melbourne and Luxembourg.