Principal launches middle-market direct lending fund
Principal Asset Management has launched the Principal Private Credit Fund I, offering exposure to lower and core middle market loans, with immediate access to the new direct lending investments.
Principal Private Credit Fund I will be managed by Principal Alternative Credit, the direct lending investment team of Principal Asset Management, and target more than 90 per cent exposure to private credit.
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“In the current market environment, many investors are attracted to the opportunity of direct lending as it provides them with attractive yields and an expectation for resilient performance through various market conditions,” said Tim Warrick, managing director of alternative credit at Principal Asset Management.
“The Principal Private Credit Fund I is tailored to meet the evolving needs of investors who prioritise significant income driven investment returns and diversification compared to other more typical investment options.”
Principal Alternative Credit reached the $2bn (£1.58bn) lending milestone through its direct lending business in January.
The US-based firm had closed more than 115 transactions as of 31 December 2023, with more than $2bn in total borrower commitments.
Principal Alternative Credit was founded in July 2020 with a view to providing flexible financing solutions across the middle-market direct lending sector.
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“With this offering, we have taken the proven approach of the Principal Alternative Credit team and offered it as an interval fund to meet the needs of our clients in the US wealth markets,” said Barbara Wenig, executive managing director, Principal Asset Management.
Wenig chairs the interval fund board and leads efforts to advance the offering of semi-liquid private assets to retail markets
Principal Asset Management is the global investment solutions business for Principal Financial Group, managing $545bn in assets.
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