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Private Credit Fund II oversubscribed at hard cap of $2.75 billion, delivering a net IRR of over 20%
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Predecessor vintage delivering 16% net IRR and 1.4x net multiple, representing top-decile returns
GoldenTree Asset Management (“GoldenTree”), a global asset management firm with approximately $70 billion in assets under management, announced the closing of its Private Credit Fund II (the “Fund”). The Fund is oversubscribed at its hard cap of $2.75 billion, reflecting strong demand from a global investor base that includes public and corporate pensions, sovereign funds, foundations, insurance companies, family offices and RIAs across the US, Europe, Asia and the Middle East. Over $800 million of the Fund’s commitments come through a rated feeder structure that provides investors capital-efficient access to the strategy. GoldenTree’s partners and employees committed $50 million to the Fund, demonstrating the firm’s conviction in the strategy and its strong alignment with investors.
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The Fund has already deployed close to 40% of commitments across approximately 50 investments in over 10 industries and is delivering a net IRR of over 20%. The Fund follows its predecessor vintage that deployed over 90% of commitments and is delivering a 16% net IRR and a 1.4x net multiple – representing top-decile returns versus peers. Focused on larger companies with average EBITDA exceeding $400mm, of the over 100 investments made in the prior fund, already more than 40 have been fully realized with unlevered gross returns of 14%. These realized investments have an average holding period of less than two years, illustrating the solution-oriented, transitional characteristics, allowing the Fund to recycle capital to compound returns and target higher net multiples than those typically achieved in the industry.
Steve Tananbaum, GoldenTree’s Founder, Managing Partner, and Chief Investment Officer, said, “As an employee-owned firm, we are focused on delivering top quartile returns. Our solutions-oriented approach to private credit allows us to deliver unique value to issuers and sponsors and generate a premium return for our investors. Furthermore, the drawdown fund structure allows us to invest opportunistically.”
Lee Kruter, Partner and Head of Performing Credit, noted, “Our team, resources, and platform allow us to be highly selective, focusing on win-win transactions rather than origination volume. This approach is illustrated through the attractive profile of the Fund’s investments that enjoy on average, double-digit unlevered yields and conservative LTVs below 50%. Furthermore, recent disruptions in private credit, while not systemic, are creating attractive opportunities in the asset class at wider spreads where providing certainly, scale and a range of solutions are valued.”
Kathy Sutherland, Partner and CEO, noted, “The Fund’s oversubscription is particularly relevant in light of recent redemptions from BDCs. It illustrates the appreciation of the asset class by institutional investors, particularly managers able to deliver differentiated returns. Private Credit Fund II’s inception to date IRR of over 20% on close to 40% of drawn capital illustrates the increasing return dispersion in the asset class. We are committed to delivering top quartile, if not top decile returns across our offerings, and are off to a strong start in this fund.”
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