NXT Capital has closed NXT Capital Senior Loan Fund III, LP, (Fund III) an $800 million leveraged loan fund that will invest in first and second lien loan transactions originated and underwritten by NXT Capital’s Corporate Finance Group.
Transactions made by Fund III will include term, delayed draw term, revolving credit, stretch senior, unitranche, first lien term behind revolver, split lien and last-out term loans made primarily to private equity-sponsored middle market companies across a range of industries.
Fund III follows NXT Capital Senior Loan Fund II, LP, a similar $783 million fund that closed in July, 2013. With the closing of Fund III the third-party capital committed to the NXT’s Corporate Finance Group’s asset management business now totals over $4 billion.
Fund III received $291 million in equity commitments primarily from seven institutional investors, comprised of pension plans, insurance companies and foundations. In addition, Wells Fargo Bank led a $420 million syndicated credit facility that provides the balance of the fund’s investment capacity. The credit facility is expected to increase in the first quarter of 2015 to bring the total fund investment capacity to $800 million.
“The addition of NXT Capital Senior Loan Fund III strengthens NXT Capital’s position as a leading provider of leveraged finance to the middle market,” said NXT Chairman and CEO Robert Radway. “Strong interest in Senior Loan Fund III also further demonstrates the appeal of middle market loans to institutional investors who are seeking to enhance returns without materially increasing interest rate or credit risk.”
“Senior Loan Fund III extends NXT’s ability to meet customers’ financing needs,” said John Finnerty, Head of NXT Capital’s Corporate Finance Group. “It also solidifies NXT’s position as a leading middle market asset manager.”
NXT Capital provides structured financing of up to $150 million with a hold size up to $50 million to middle-market companies through its Corporate Finance, Equipment Finance, and Real Estate Finance groups. NXT Capital also provides investment advisory services through its wholly-owned subsidiary NXT Capital Investment Advisers. The firm is based in Chicago with offices in Atlanta, Charlotte, Dallas, Los Angeles, Nashville, New York, Phoenix, San Francisco and Stamford (www.nxtcapital.com).
© 2015 PEPD • Private Equity’s Leading News Magazine • 1-28-15