Senior loan fund launched by PennantPark and Hamilton Lane in partnership
PennantPark Floating Rate Capital and alternative investment manager Hamilton Lane have launched a new investment vehicle, the PennantPark Senior Secured Loan Fund II (PSSL II). This joint venture, focused on expanding PennantPark's core business in middle market senior secured loans, has an initial combined investment commitment of $200 million.
The strategic focus of PSSL II is to invest primarily in middle market loans, aligning with PennantPark’s established origination and underwriting approach. The fund aims to target senior secured loans that offer attractive yields in the middle market segment, with the goal of bolstering PennantPark's market presence and enhancing returns on equity and net investment income per share.
To achieve this growth, PSSL II plans to secure an additional $300 million financing facility, bringing the fund's initial portfolio to approximately $500 million. This structure allows PennantPark to deploy capital more efficiently than on its standalone balance sheet, potentially generating higher returns while maintaining disciplined credit underwriting standards.
The partnership with Hamilton Lane, a leading private markets investment firm, enhances investment capabilities and access to high-quality credit opportunities in the middle market. Hamilton Lane will invest $50 million into PSSL II, demonstrating their shared vision to broaden their impact as a significant direct lender in the middle market.
The investment in PSSL II by Hamilton Lane is an indication of their continued confidence in PennantPark's investment strategy. The investment in PSSL II is not the only joint venture between the two firms, suggesting a long-term strategic partnership.
PennantPark's CEO, Arthur H. Penn, stated that the new joint venture will broaden their impact as a significant direct lender in the middle market. The investment in PSSL II is additional to the funds already committed to PennantPark's fourth credit opportunities fund, which has successfully raised $610 million, a testament to the market's confidence in their investment strategy.
The investment firms are scheduled to begin investing in PSSL II's portfolio in late September or early October. The investment in PSSL II by Hamilton Lane and the growth of the fund to $500 million are expected to contribute significantly to the growth of both firms and the middle market lending sector.
The PennantPark Senior Secured Loan Fund II (PSSL II) will primarily invest in middle market loans, aligning with PennantPark's established origination and underwriting approach, with the aim of bolstering PennantPark's market presence and enhancing returns on equity and net investment income per share. To achieve this growth, PSSL II plans to secure an additional $300 million financing facility, bringing the fund's initial portfolio to approximately $500 million, indicating a strategic focus on finance.
The investment by Hamilton Lane, a leading private markets investment firm, not only demonstrates their shared vision to broaden their impact as a significant direct lender in the middle market but also underscores their continued confidence in PennantPark's investment strategy, further highlighting the importance of finance in this partnership.
