Audax Private Debt Closes Second Direct Lending Fund

Audax Private Debt Closes Second Direct Lending Fund

The firm's new direct lending fund was oversubscribed and nearly doubles the size of its prior fund

Audax Private Debt has closed Audax Direct Lending Solutions Fund II LP (DLS Fund II) with $3 billion of capital commitments.

The new fund – which provides senior secured unitranche and stretch senior financings – closed above its target of $2.25 billion and at its hard cap. Including leverage, DLS Fund II will have a total of $4.5 billion of total investable capital. Audax’s DLS Fund I closed in 2018 with $2.6 billion of investable capital.

DLS Fund II received commitments from an array of institutional investors from the US, Canada, Europe, Asia-Pacific, the Middle East, and Latin America including pension funds, sovereign wealth funds, insurance companies, family offices, endowments and foundations.

“We are extremely pleased to have again received broad investor interest in our Direct Lending Solutions strategy and want to thank our limited partners,” said Kevin Magid, the president of Audax Private Debt. “We believe the demand for DLS Fund II reflects our excellent investing track record, our deep experience across multiple credit cycles, and our consistent underwriting approach in a wide variety of economic environments. Coupled with our other senior debt and junior capital funds, the expansion of our unitranche financing capabilities through DLS Fund II further positions Audax Private Debt as a lender of choice to private equity borrowers.”

Audax Private Debt makes first lien, stretch senior, unitranche, second lien, junior debt, and equity co-investments in North American-based private equity-sponsored middle-market companies. The lender was founded in 2000 and has invested over $34 billion across more than 1,200 companies backed by more than 275 private equity sponsors. In May 2021, Audax Private Debt closed Audax Mezzanine Fund V LP with just over $1.8 billion in capital commitments.

Audax is actively investing through DLS Fund II and has already made $1.6 billion of loan commitments.

“We look forward to building upon our longstanding relationships with financial sponsors, while forging new partnerships with private equity firms seeking a lender to support new platform acquisitions, catalyze portfolio company growth, or achieve liquidity events to crystallize value creation,” said Rahman Vahabzadeh and Steven Ruby, co-heads of origination at Audax Private Debt. “The capital raised in DLS Fund II will allow us to provide unitranche and stretch senior financing of up to $200 million per transaction. Historically, it’s in these types of environments — when capital has become constrained — that our value proposition as a sophisticated and thoughtful financing partner distinguishes our approach in direct lending.”

Audax Private Debt is part of Audax Group, an investor in middle-market companies that have from $8 million to $50 million in EBITDA and enterprise values of $50 million to $400 million. Sectors of interest include business and consumer services; energy; healthcare; technology, media and telecom; and industrials including chemicals, infrastructure, and building materials. Audax, with offices in Boston, New York, and San Francisco, is currently investing out of its $3.5 billion, sixth private equity fund.

© 2023 Private Equity Professional | January 24, 2023

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