Opportunities Emerging From the M&A Slowdown
Direct lending and mezzanine present a strong investment case across economic cycles, and more opportunities will arise as M&A activity thaws.
Direct Lending
A diversified, middle market direct lending business focused on first lien, floating rate, senior secured loans.
Investment Strategy
PGIM Private Capital Direct Lending focuses on providing senior secured loans. These loans benefit from liquidation preference, contractual debt repayment, full covenants, and terms protections. Key tenants of our strategy include:
- Focus on the middle market ($10-100mm of EBITDA)
- Industry generalist approach
- Geographic focus on North America, Western Europe and Australia
- Non-sponsored and sponsored portfolio mix
- Typical senior leverage in the 2.5x-4.5x range
- Sole, Lead, or Co-Lead on 89% of deals since inception
We have managed our Direct Lending strategy since 2000, investing $12.3 billion in the asset class over our 24-year track record.*
Our disciplined underwriting, experienced investment committee, and in-house workouts resources have allowed us to generate what we believe are strong risk-adjusted returns through market cycles with low default and loss rates.
GLOBAL ORIGINATIONS NETWORK
Our Direct Lending strategy originates loans through PGIM Private Capital’s network of 15 offices across the globe – providing access to direct deal flow – and through comprehensive coverage of sponsors and intermediaries with dedicated direct lending coverage in select offices. Our ability to originate both non-sponsored and sponsored loans enables selectivity and relative value selection as markets move at difference cadence.
PGIM Private Capital Direct Lending at a Glance*
$12.3B
Originated Since 20003.2x
Average Entry Senior Leverage365
Number of Loans
Transaction Profiles
Recent Transactions
Related insights
2023 PGIM X CAIA Private Debt APAC Forum
Where can investors unlock opportunities in private debt and direct lending to meet investment objectives?
Direct Lending and the Shift to Non-Sponsored Deal Flow
Traditional models of how companies raise capital have been substantially disrupted in recent years.
*Sources of data (unless otherwise noted) are as of 9/30/2024.
