The investment advisory arm of Steadfast Companies has partnered with Alcentra Group to raise a new $3 billion credit fund targeting mid-market companies globally, according to an SEC filing.
The Steadfast Alcentra Global Credit Fund is authorised to invest up and down the capital stack, primarily making direct investments in lower mid-market and mid-market companies with fixed and floating-rate senior secured loans, second-lien loans and subordinated debt and, to a lesser extent, minority equity investments.
Both firms declined to comment on the fundraise.
The credit fund will target companies with revenues between $25 million and $750 million or with EBITDA of between $5 million and $50 million. The vehicle will be focused primarily on companies in North America and western Europe, although the fund may invest in other regions globally, too.
The filing also states that 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 fund aims to build a portfolio of over 100 positions and also will seek to invest in debt with interest rate coupons of 6 percent to 10 percent on senior term loans, 10 percent to 11 percent on second lien, 12 percent to 15 percent on mezzanine.
Alcentra, a wholly-owned subsidiary of BNY Mellon, has raised a significant amount of capital for its other credit fund, the European Direct Lending Fund II (EDL II), hitting €2 billion this June, blowing past that fund’s original target of €1.5 billion. The firm has already greenlit at least €400 million in investments from EDL II earlier this year.
The London-based investment firm manages approximately $29 billion in below-investment grade debt assets across more than 75 investment vehicles and funds, according to the filing. Steadfast Companies, based in Irvine, California, is an investment, management and development company that owns or manages over $5.4 billion in assets.