Steadfast Capital Markets Group and Alcentra have lifted their new mid-market lending fund off the ground, the firms said on Monday.
The Steadfast Alcentra Global Credit Fund will offer up to $3 billion in common stock for sale, setting an initial price of $9.68 per share, according to a statement. Steadfast is the investment advisor for the fund, while Alcentra will sub-advise the vehicle.
The fund will use the offering’s proceeds to provide floating- and fixed-rate senior secured loans, second lien loans, subordinated debt and minority equity investments to lower mid-market and mid-market companies in western Europe and the US.
Christopher Hilbert, chief executive officer of the fund, said in the statement: “Financial regulations introduced in the United States and Europe in recent years have resulted in constrained traditional bank lending to middle-market companies, providing a growing opportunity for alternative direct lenders.”
Alcentra and Steadfast were not immediately available to comment further.
The two firms disclosed the new fund in November, as Private Debt Investor reported. The fund’s official registration with the US Securities and Exchange Commission went into effect 8 May, a filing shows.
The fund’s investments will range in size from $5 million to $15 million, “although the average investment size will likely be higher if the Fund raises significant capital in this offering,” the SEC prospectus filed in May read.
The fund aims to build a portfolio of over 100 positions and will also seek to invest in debt with interest rate coupons of 6-10 percent on senior term loans, 10-11 percent on second lien investments and 12-15 percent on mezzanine debt.
The credit fund will target companies with revenues between $25 million and $750 million or with EBITDA of between $5 million and $50 million.
Alcentra, a wholly-owned subsidiary of Bank of New York Mellon, manages below-investment grade credit with $31.5 billion of assets under management across more than 75 investment vehicles, according to the statement.
Steadfast Companies, based in Irvine, California, is an investment and development company that owns or manages over $5.4 billion in assets.