A new investment vehicle has been launched by US-based business development company PennantPark Floating Rate Capital and alternative investment manager Hamilton Lane.

Set to invest predominantly in middle market loans, PennantPark Senior Secured Loan Fund II (PSSL II) will receive $150m (£111.4m) of notes and equity from PennantPark Floating Rate Capital and $50m (£37.1m) from Hamilton Lane. A financing facility of $300m (£222.9m) is also planned to grow the fund to $500m (£371.4m).

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“This new joint venture is another strategic step to broaden our impact as a meaningful core middle market direct lender and will expand our ability to provide senior loan solutions to core middle market sponsor and borrower clients,” said Arthur H. Penn, PennantPark Floating Rate Capital’s chief executive.

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“PennantPark’s leading position in the core middle market complements our commitment to delivering differentiated private credit access and strong risk-adjusted returns to our investors,” said Nayef Perry, head of direct credit at Hamilton Lane.

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The investment firms are set to begin investing in PSSL II’s portfolio in late September or early October.