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HedgeCo.Net \u2014 PennantPark Investment Advisers has held the final close of PennantPark Senior Credit Fund II above its original target, with $1.2 billion of investable capital. Together with the recently completed PennantPark Credit Secondary Fund, the Miami-based manager said the two vehicles represent about $1.9 billion of aggregate capital for its core middle-market lending strategy.<\/p>\n
The headline figure needs careful reading. PennantPark defines investable capital as committed equity plus available leverage, including borrowing capacity under credit facilities, and said the $1.2 billion covers all levered and unlevered series in the PSCF II family as well as related mandates. The firm stated explicitly that investable capital is not a measure of equity raised. The fund drew pension plans, insurers, asset managers and family offices across North America, Europe and Asia.<\/p>\n
The secondary fund closed in September as a $745 million continuation vehicle. It provided liquidity to limited partners in legacy private funds while securing additional unfunded commitments for follow-on financings and new investments. Proceeds were used to buy investments from the legacy funds, complete follow-on financings and make new loans.<\/p>\n
Both vehicles follow PennantPark’s senior debt strategy, which targets first-lien senior secured loans to cash-flowing, sponsor-backed companies with $10 million to $50 million of earnings. The firm emphasizes low borrower leverage, ample interest coverage and financial covenants, and focuses on healthcare, government services, technology, consumer and business services. Founder and managing partner Arthur Penn said the core middle market offers wider spreads, lower leverage and stronger lender protections as more capital competes for larger deals.<\/p>\n
The pairing of a new commingled fund with a continuation vehicle is a sign of how mid-sized credit managers are managing liquidity for older funds while raising new money. For allocators, the covenant argument is the main draw of the lower middle market as larger direct lenders compete on terms. The open question is how the risk profile of the PSCF II family shifts across its levered and unlevered series, which is why the investable-capital caveat matters as much as the headline number.<\/p>\n","protected":false},"excerpt":{"rendered":"
HedgeCo.Net \u2014 PennantPark Investment Advisers has held the final close of PennantPark Senior Credit Fund II above its original target, with $1.2 billion of investable capital. Toge\u2026 Continue reading