Key Takeaways
- • Jefferies Credit Partners, the asset management arm of Jefferies Finance LLC, announced its intention to launch a private placement of a business development company (BDC) focused on private credit.
- • A wholly owned subsidiary of the Abu Dhabi Investment Authority (ADIA) has committed $625 million of equity to anchor the BDC launch.
- • The BDC expects to launch with approximately $1.7 billion of investable capital.
- • The vehicle will make first lien senior secured loans to private equity-sponsored U.S. companies, targeting upper middle market borrowers with more than $75 million of EBITDA.
- • Jefferies Finance is a joint venture of Jefferies Financial Group Inc. (NYSE: JEF) and MassMutual.
Summary
Jefferies Credit Partners, a private credit manager and the asset management arm of Jefferies Finance LLC, announced on July 19, 2023 (per Business Wire) its intention to launch a private placement of a business development company. The newly formed BDC is designed to expand the firm's lending capacity in private credit. Jefferies Finance is a joint venture of Jefferies Financial Group Inc. (NYSE: JEF) and Massachusetts Mutual Life Insurance Company (MassMutual).
The BDC will focus on first lien senior secured loans to private equity-sponsored U.S. companies. Investments will target upper middle market borrowers with EBITDA greater than $75 million, which the firm says often have established track records, seasoned management and operational scale.
A wholly owned subsidiary of the Abu Dhabi Investment Authority has committed to invest $625 million of equity to anchor the launch. The BDC expects to launch with approximately $1.7 billion of investable capital. The firm states the vehicle aims to take advantage of strong private credit market conditions while leveraging Jefferies' position serving sponsors.
Thomas Brady, President of Jefferies Finance, said the ADIA agreement to seed the first BDC "comes as the tailwinds in the private credit market have never been stronger." Hamad Shahwan AlDhaheri, Executive Director of the Private Equities Department at ADIA, said the independently run platform will benefit from a unique origination engine through its partnership with Jefferies' investment banking franchise, providing exclusive access to differentiated investment opportunities.
The press release is not an offer to buy or sell BDC shares. Offering will be made only through the definitive Private Placement Memorandum and related documents, including a Form 10 registration statement to be filed with the SEC. Prior to the initial close, the BDC intends to elect regulation under the Investment Company Act of 1940.
The BDC will focus on first lien senior secured loans to private equity-sponsored U.S. companies. Investments will target upper middle market borrowers with EBITDA greater than $75 million, which the firm says often have established track records, seasoned management and operational scale.
A wholly owned subsidiary of the Abu Dhabi Investment Authority has committed to invest $625 million of equity to anchor the launch. The BDC expects to launch with approximately $1.7 billion of investable capital. The firm states the vehicle aims to take advantage of strong private credit market conditions while leveraging Jefferies' position serving sponsors.
Thomas Brady, President of Jefferies Finance, said the ADIA agreement to seed the first BDC "comes as the tailwinds in the private credit market have never been stronger." Hamad Shahwan AlDhaheri, Executive Director of the Private Equities Department at ADIA, said the independently run platform will benefit from a unique origination engine through its partnership with Jefferies' investment banking franchise, providing exclusive access to differentiated investment opportunities.
The press release is not an offer to buy or sell BDC shares. Offering will be made only through the definitive Private Placement Memorandum and related documents, including a Form 10 registration statement to be filed with the SEC. Prior to the initial close, the BDC intends to elect regulation under the Investment Company Act of 1940.
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