Crestline Investors, which manages $18bn (£13.6bn) in credit assets, has launched a new lending solutions fund focused on business development companies (BDCs) in the lower and core middle market.
The Crestline Lending Solutions Fund (CLSF) marks the Texas-based alternative credit manager’s first BDC vehicle and will primarily invest alongside Crestline’s direct lending strategy.
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“The largest perpetual BDCs face significant overlap in their portfolios, leading to substantial private credit ‘beta’ across these vehicles,” said Chris Semple, co-head of US corporate credit at Crestline and chief executive of CLSF. “We believe our focus on the lower and core middle market, along with tactical allocations to other forms of private credit, can offer investors an attractive alternative or complement to their existing perpetual BDC holdings.”
Over the past 12 months, Crestline’s direct lending strategy has committed more than $1.9bn across 46 transactions.
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Semple added: “We’ve seen other BDCs become victims of their own success, they can’t deploy capital quickly enough given investor demand. The result is a tilt towards larger, more competitive deals where lenders have less pricing and negotiating power. We’d prefer a measured pace of growth that enhances our ability to deliver alpha for investors.”
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