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Stellus Capital Management Launches Private Business Development Company

May 20, 2022, 07:50 AM
Filed Under: Private Equity News

Stellus Capital Management, a leader in middle market direct lending, announced the final close of Stellus Credit Fund III (“SCF III” or “the Fund”). The Firm materially exceeded its target fundraising goal with approximately $1.8 billion of investable capital including target leverage, capital commitments to SCF III, investor-specific vehicles, and a newly launched private Business Development Company (Stellus Private Credit BDC (“SPBDC”). SCF III, the successor to Stellus Credit Fund II (a $478 million fund closed in September 2018), closed on March 25, 2022 and has already invested in 36 portfolio companies.

As part of the Firm’s focus on offering diverse options to meet investors’ structural needs, Stellus raised $225 million of anchor capital for Stellus Private Credit BDC, a private business development company regulated under the Investment Company Act of 1940, as amended. This new, evergreen vehicle serves accredited investors directly and through their registered investment advisors (RIAs), investing parallel with other Stellus funds in the same middle market, direct lending strategy successfully implemented over the last 18-years.

Similar to its predecessor funds, SCF III and SPBDC are focused on identifying and pursuing private credit opportunities, originated and underwritten by Stellus, in a diverse range of industries in the United States and Canada. Stellus focuses on building a broad portfolio of direct lending investments in industries such as Business Services, Consumer & Retail, Healthcare, Industrials, and Media & Technology.

SCF III and SPBDC received commitments from new and existing institutional and high-net-worth investors worldwide, including leading public and private pension plans, insurance companies, foundations, family offices, global investment banks, consultants, and other institutional investors.

“The overwhelming interest in SCF III and Stellus Private Credit BDC is a testament to our long-term track record of success and investors’ confidence in our understanding of this increasingly important marketplace,” said Robert T. Ladd, Managing Partner, Stellus Capital Management. “With significant dry powder, we’re excited about the opportunity to utilize our robust origination capabilities, taking advantage of a strong private credit pipeline to provide investors with attractive risk-adjusted returns relative to other asset classes.”

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