Arcmont targets €12bn for European direct lending fund

Arcmont Asset Management is looking to raise at least €12bn (£10.1bn) for a new European direct lending fund.

This will be the private debt firm’s fifth fund from its flagship strategy, according to Bloomberg, having raised €10bn for its last European direct lending fund in January this year.

Arcmont is offering investors a net internal rate of return of between eight per cent and 14 per cent, according to sources cited by Bloomberg.

They said the return depends on preferences regarding fund leverage and subordinated debt.

Read more: Principal predicts “manageable” default rates for direct lending market

Arcmont’s direct lending strategy invests in a defensive, diversified portfolio consisting mainly of senior loans, as well as unitranche, second lien and subordinated loans.

The latest fundraise comes as Arcmont readies to launch a Long-Term Asset Fund (LTAF) focused on private credit.

The firm received regulatory approval last month for the CG Arcmont Private Credit Europe LTAF, which will be available to professional investors and offer access to direct lending investments to European upper mid-market businesses.

The open-ended strategy is the first LTAF to focus on private debt.

Arcmont was acquired by US asset manager Nuveen last year. Since it was founded in 2011, the group has raised more than €29bn and has invested in more than 350 deals.