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First Eagle Alternative Credit Closes Fourth Middle-Market Direct Lending Fund

February 07, 2020, 08:39 AM
Filed Under: Industry News

First Eagle Alternative Credit, LLC announced the final closing of its fourth middle-market direct lending fund, THL Credit Direct Lending Fund IV (“Fund IV”), with $782 million of available investment capacity including leverage. First Eagle Alternative Credit is a leading alternative credit manager formed by the combination of THL Credit with the private credit operations of First Eagle Investment Management, LLC (“First Eagle”), which acquired THL Credit on January 31, 2020. The platform created approximately $1.5 billion of direct lending capacity in 2019, including more than $700 million raised across its two Lake Shore middle-market CLOs.

“We received strong demand from new and existing institutional investors and consultants,” said Chris Flynn, President of First Eagle Alternative Credit. “We continue to maintain a strong pipeline of directly originated loans in 2020, and Fund IV is already meaningfully invested.” Fund IV is focused on providing senior-secured loans to sponsor-backed companies with EBITDA of $10–40 million. A previous direct lending fund, THL Credit Direct Lending Fund III, raised $511 million in 2017 and pursued a similar investment strategy.

First Eagle, an independent, privately owned investment firm, managed $118 billion across asset classes as of December 31, 2019, on a pro forma basis for the acquisition of THL Credit; this includes First Eagle Alternative Credit’s $23 billion in assets under management and advisement, $7 billion of which is in middle-market direct lending assets. The full rebranding of THL Credit entities and assets, including THL Credit Direct Lending Fund IV, is expected to be completed over the coming weeks.

“As a result of the First Eagle transaction, we expect that the increased scale of our combined direct lending platform will further improve our competitiveness in originating alternative investments and enhance our network of sponsor relationships,” added Flynn.

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