Johnny Madrid
Mid-market non-sponsored deals continue to entice debt managers to dip their toes, but there is a lack of data and concerns about risk.
Debt managers are moving down the capital structure to enhance risk-adjusted returns, while private equity players move up to protect risk.
The debt fund manager’s investment was paid off three-and-a-half years ahead of maturity through a refinancing.
New entrants into private debt are hunting for yield in a competitive landscape that is technically complex.
The pension previously committed $351m in 2015-16, half of its debt commitments in those years.
The direct lending fund manager is buried by $700,000 in legal fees and looming scepticism over its ability to wind down .
The $4.2bn pension fund currently allocates 16.4% to alternatives – with only 0.4% of its private equity portfolio assigned to private credit.
The healthcare specialist purchased the portfolio company from Cortec Group last year.
APFC may fall short of its 17% allocation goal for real assets and private income funds – which includes private credit – in FY 2018.
The vehicle will take 30-40 positions in companies with EBITDA of $25m-$200m.