Bridgepoint Credit has transferred €1.2bn (£1.03bn) of loans from an older direct lending fund into a continuation vehicle (CV) led by secondaries investor Pantheon.

The loans in the vehicle are from Bridgepoint Direct Lending II (BDL II), a 2017-vintage direct lending fund with exposure to European middle-market companies.

The €20bn European credit manager said the vehicle gives investors in the BDL II fund the option to realise their investment or retain their exposure, with the transaction attracting both new and existing investors and was oversubscribed.

Paul Johnson, Bridgepoint Credit’s deputy managing partner and chairman of direct lending, explained that the vehicle is there to provide a “choice” for BDL II investors.

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The news comes as the private credit secondaries market has grown rapidly in recent years, particularly in the general partner (GP)-led continuation vehicle segment. Recent large transactions include $3.2bn (£2.4bn) of Crescent Capital assets sold to a Pantheon-led vehicle and a $2.3bn continuation fund led by Coller Capital for Benefit Street Partners.

“The transaction reflects the growing demand for scaled GP-led solutions in private credit and, as lead investor, we were able to draw on our credit secondaries and GP solutions expertise to provide investors with a tailored liquidity option while gaining access to a seasoned portfolio of high-quality European middle-market loans,” said Toni Vainio, partner and head of European private credit at Pantheon.

The BDL II fund is weighted towards senior secured credits across the healthcare, services and technology sectors, with borrowers across the UK, DACH, Nordics, Benelux and French middle market, the manager said.

Bridgepoint will remain manager of the portfolio and oversee each position until realisation.

Evercore acted as financial adviser, while Kirkland & Ellis acted as legal adviser to Bridgepoint Credit on the transaction. Proskauer acted as legal adviser to Pantheon.

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