PPM America raises $300 million for its sixth CLO fund.

PPM America, a subsidiary of UK-based Prudential plc, has raised $300 million for its sixth collateralized loan obligation (CLO) fund. The fund will invest in a diversified portfolio of senior secured loans issued by middle-market companies in North America.

CLOs are structured investment vehicles that pool together loans and issue securities backed by the underlying assets. The securities are then sold to investors, who receive regular interest payments and principal repayments as the loans are repaid. CLOs have become increasingly popular in recent years as investors seek higher yields in a low-interest-rate environment.

PPM America’s sixth CLO fund will have a target size of $500 million and is expected to close in the first quarter of 2022. The fund will be managed by PPM America’s leveraged finance team, which has over 20 years of experience investing in middle-market loans.

“We are pleased to have raised $300 million for our sixth CLO fund, which reflects the continued demand for our investment strategy and the strength of our team,” said John Toomey, head of leveraged finance at PPM America. “We believe that the middle-market lending space offers attractive risk-adjusted returns, and we are well-positioned to capitalize on these opportunities.”

The middle-market lending space refers to loans made to companies with annual revenues between $10 million and $1 billion. These companies often have limited access to traditional bank financing and rely on alternative lenders like PPM America for funding. Middle-market loans typically offer higher yields than investment-grade bonds but come with higher credit risk.

PPM America’s leveraged finance team has a disciplined investment process that focuses on credit analysis, portfolio diversification, and risk management. The team conducts extensive due diligence on potential investments, including analyzing financial statements, meeting with management teams, and assessing industry trends.

“We believe that our rigorous investment process and experienced team give us a competitive advantage in the middle-market lending space,” said Toomey. “We are committed to delivering attractive risk-adjusted returns to our investors while maintaining a strong focus on risk management.”

PPM America’s sixth CLO fund is expected to attract a mix of institutional and retail investors. The fund will be structured as a 144A offering, which allows it to be sold to qualified institutional buyers in the United States.

In conclusion, PPM America’s sixth CLO fund is a testament to the growing demand for middle-market loans and the expertise of its leveraged finance team. The fund’s diversified portfolio of senior secured loans offers investors an attractive risk-adjusted return in a low-interest-rate environment. With a target size of $500 million, the fund is poised to capitalize on the opportunities in the middle-market lending space and deliver value to its investors.

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