A little-known US lender hits Australian shores for a $3.1b fundraise

afr.com:

Deerpath Capital, a US-based lender, has tapped Australian superannuation funds and family offices for a potential $US2 billion ($3.1 billion) fundraising effort.

The little-known lender with more than $US5 billion in assets is the latest in a string of overseas players turning to Australia for institutional fundraising needs. Asset managers including Blue Owl Capital and Apollo Global Management’s Marc Rowan were in Australia last month to win over super funds, which are investigating options to juice members’ returns.

Natalie Garcia, Deerpath Capital’s head of underwriting, and Ben Daly, the firm’s head of investor relations. Eamon Gallagher

Private credit is becoming increasingly relevant in the financing market as lenders like Ares, HPS and Blackstone Credit play meaningful roles in funding large private equity-backed acquisitions. In Australia, a trio of major sponsor deals bypassed traditional investment banks, and opted for loans from private credit funds last month.

Advent International’s purchase of fashion brand Zimmerman was backed by Carlyle and HPS, funeral operator InvoCare’s purchase by TPG Capital was supported by an Ares-led lender group, and KKR Credit committed debt for PAG’s acquisition of pub operator Australian Venue in July.

Unlike Apollo or KKR, Deerpath targets smaller borrowers valued between $US50-$US200 million, and lends between $US25-$US100 million to private equity-owned businesses.

“This lower end of the US middle market represents potentially the strongest return and lender protections available in the entire direct lending space,” Ben Daly, Deerpath’s head of investor relations, told The Australian Financial Review.

“As the fourth-largest pension market in the world, Australia has some