PGIM Closes $4.2 Billion Middle Market Direct Lending Fund

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PGIM has successfully completed the final closing of its second middle market direct lending fund, PGIM Senior Loan Opportunities II, L.P. (PSLO II), with over $4.2 billion in capital commitments. This makes it one of the largest fundraises of its kind this year, backed by a wide range of institutional investors from around the world.

Building on the success of its first fund, this new fund will offer secure financing to mid-sized companies across North America, Europe, and Australia. Its main goal is to generate strong returns by carefully investing in a diverse mix of loans that are directly sourced, not just from private equity deals.

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A key differentiator for PSLO II is its focus on both “sponsored” and “non-sponsored” deals. Matt Harvey, head of middle market direct lending for PGIM, highlighted that while much of the growth in direct lending has been in sponsor-backed deals, this channel alone isn’t enough for proper diversification. With more than 90% of middle market companies in the U.S. not owned by private equity firms, PGIM’s ability to access both channels gives them a significant advantage.

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PGIM has a long history in the private credit market, managing direct lending strategies for affiliated investors since 2000. This experience allows them to build long-standing relationships and create proprietary deal flow, which is crucial for success in a market with information asymmetry. This fundraise reinforces PGIM’s position as a major player in the private credit space, which is further strengthened by its recent decision to combine its Fixed Income and Private Credit businesses into a unified global credit platform.

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Source : businesswire

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