GoldenTree Asset Management has closed its second private credit fund at its hard cap of $2.75bn (£2.04bn), after the “oversubscribed” fund saw “strong demand” from a global investor base.

Private Credit Fund II secured commitments from public and corporate pensions, sovereign funds, foundations, insurance companies, family offices and RIAs across the US, Europe, Asia and the Middle East.

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More than $800m of the fund’s commitments came via a rated feeder structure that provides investors with “capital-efficient access” to the strategy, while GoldenTree’s partners and employees committed $50m to the fund.

To date, the fund has deployed nearly 40 per cent of commitments across approximately 50 investments in more than 10 industries and has delivered a net internal rate of return (IRR) of over 20 per cent.

GoldenTree’s first private credit fund deployed more than 90 per cent of commitments and a 16 per cent net IRR. 

Lee Kruter, partner and head of performing credit at GoldenTree, said that recent disruptions in private credit, “while not systemic, are creating attractive opportunities in the asset class at wider spreads” where “scale and a range of solutions are valued”.

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“The fund’s oversubscription is particularly relevant in light of recent redemptions from BDCs [business development companies]. It illustrates the appreciation of the asset class by institutional investors, particularly managers able to deliver differentiated returns,” added Kathy Sutherland, partner and chief executive of GoldenTree.

“Private Credit Fund II’s inception to date IRR of over 20 per cent on close to 40 per cent of drawn capital illustrates the increasing return dispersion in the asset class. We are committed to delivering top quartile, if not top decile returns across our offerings, and are off to a strong start in this fund.”

GoldenTree, which manages $70bn of assets, specialises in opportunities across sectors such as high-yield bonds, leveraged loans, private credit, distressed debt, structured credit, emerging markets, real estate, private equity, and credit-themed equities.

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