Key Takeaways
- • PGIM, LGT Capital Partners and Tree Line Capital Partners have closed a $680 million private credit continuation vehicle focused on a diversified portfolio of U.S. lower middle-market loans.
- • PGIM and LGT Capital Partners acted as co-lead investors; the vehicle is managed by San Francisco-based direct lender Tree Line Capital Partners.
- • The vehicle acquired a seasoned portfolio of primarily senior secured, first-lien loans to more than 60 U.S. lower middle-market companies across a broad range of industries.
- • The deal gives existing investors across several Tree Line direct lending funds a liquidity option while Tree Line retains management of the underlying assets.
- • The transaction follows PGIM's earlier-2026 plan to deploy up to $1 billion over two years in private credit secondaries, underscoring growing use of secondary structures in private credit.
Summary
PGIM, LGT Capital Partners and Tree Line Capital Partners have closed a $680 million private credit continuation vehicle focused on a diversified portfolio of U.S. lower middle-market loans, according to the publisher's report. PGIM and LGT Capital Partners acted as co-lead investors in the vehicle, which is managed by San Francisco-based direct lender Tree Line Capital Partners.
The continuation vehicle gives existing investors across several Tree Line direct lending funds a liquidity option while allowing Tree Line to continue managing the underlying assets. The vehicle acquired a seasoned portfolio consisting primarily of senior secured, first-lien loans to more than 60 U.S. lower middle-market companies operating across a broad range of industries, supported by a diversified group of private equity sponsors.
The transaction follows PGIM's announcement earlier in 2026 that it was expanding into private credit secondaries, with plans to deploy up to $1 billion over two years. That initiative targets both GP-led and LP-led opportunities across direct lending and opportunistic private credit, with an emphasis on middle-market transactions in the U.S. and Europe. PGIM, the global asset management business of Prudential Financial, manages approximately $1.5 trillion in assets.
LGT Capital Partners, which manages more than $120 billion, has invested in credit secondaries since 2009 and combines dedicated secondaries capabilities with its broader global private markets platform. The firm tracks more than 35,000 private companies and over 800 credit funds and maintains relationships with more than 800 private equity sponsors. For Tree Line, the deal adds capital flexibility while preserving management of established private credit investments.
Campbell Lutyens served as financial advisor on the transaction, and Morgan, Lewis & Bockius served as legal counsel to PGIM. Alex Stuart, Head of Private Credit Secondaries at PGIM, said that continuation vehicle solutions are gaining traction across a broader range of portfolio sizes, including mid- and small-cap investments. Felix Janssen, Partner and Co-Head of Private Credit Solutions at LGT Capital Partners, said the deal provides exposure to a diversified portfolio of high-quality senior secured loans. Tom Quimby and Jon Schroeder, Co-Managing Partners at Tree Line Capital, described the transaction as a way to work with blue-chip partners and deliver attractive capital solutions to investors.
The continuation vehicle gives existing investors across several Tree Line direct lending funds a liquidity option while allowing Tree Line to continue managing the underlying assets. The vehicle acquired a seasoned portfolio consisting primarily of senior secured, first-lien loans to more than 60 U.S. lower middle-market companies operating across a broad range of industries, supported by a diversified group of private equity sponsors.
The transaction follows PGIM's announcement earlier in 2026 that it was expanding into private credit secondaries, with plans to deploy up to $1 billion over two years. That initiative targets both GP-led and LP-led opportunities across direct lending and opportunistic private credit, with an emphasis on middle-market transactions in the U.S. and Europe. PGIM, the global asset management business of Prudential Financial, manages approximately $1.5 trillion in assets.
LGT Capital Partners, which manages more than $120 billion, has invested in credit secondaries since 2009 and combines dedicated secondaries capabilities with its broader global private markets platform. The firm tracks more than 35,000 private companies and over 800 credit funds and maintains relationships with more than 800 private equity sponsors. For Tree Line, the deal adds capital flexibility while preserving management of established private credit investments.
Campbell Lutyens served as financial advisor on the transaction, and Morgan, Lewis & Bockius served as legal counsel to PGIM. Alex Stuart, Head of Private Credit Secondaries at PGIM, said that continuation vehicle solutions are gaining traction across a broader range of portfolio sizes, including mid- and small-cap investments. Felix Janssen, Partner and Co-Head of Private Credit Solutions at LGT Capital Partners, said the deal provides exposure to a diversified portfolio of high-quality senior secured loans. Tom Quimby and Jon Schroeder, Co-Managing Partners at Tree Line Capital, described the transaction as a way to work with blue-chip partners and deliver attractive capital solutions to investors.
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