Pantheon has filed to register a dedicated private credit secondaries-focused investment strategy dedicated to the US private wealth market as an increasing number of firms attempt to tap non-institutional capital.
The launch of AMG Pantheon Credit Solutions Fund comes as many evergreen structures push into secondaries investing. Pantheon’s own evergreen private equity fund, AMG Pantheon Fund, has just over half of its $2.37 billion of AUM invested into secondaries, according to its fund factsheet.
The firm believes the credit fund, which it refers to as PSECC, will be able to benefit from key strengths in secondaries investing including the potential for attractive discounts that can enhance returns and mitigate against potential defaults, greater diversification, shorter durations and quicker distributions compared with other methods of accessing private credit, according to a statement.
PSECC aims to build out a private credit exposure diversified by manager, vintage year, industry sector and company, the statement said. The vehicle will seek performing private credit at discounted pricing, “providing the potential to generate strong, risk-adjusted total returns with an attractive income stream”, the statement added.
The firm sees a “strong opportunity for investors to capitalise on the supply-demand imbalance of capital and expertise in this space, similar to the evolution of secondaries across private equity, infrastructure and real assets”, Pantheon partner and global head of private credit Rick Jain said in the statement.
In May, Pantheon closed its dedicated private credit secondaries fund Pantheon Credit Opportunities Fund II on $590 million, exceeding its $350 million target. Last year, the firm closed on a pair of credit secondaries funds. The firm raised $834 million for Pantheon Senior Debt II, which targets senior debt investments, and €510 million for the second generation of a fund aimed squarely at investors in the DACH region, Secondaries Investor reported.
Unrealised assets in private credit funds stand at around $1.5 trillion and are growing 10-15 percent annually, Jain told Secondaries Investor this year. There are also nearly 1,200 private credit managers globally and new fundraisings are expected to total around $200 billion each year, he added.
“Increasing exposure to an illiquid asset class like private credit means that more, and different types of, investors will ultimately need liquidity to accomplish their portfolio management objectives, which will drive secondaries dealflow,” he added.
Other evergreen private equity products with a heavy weighting to secondaries include StepStone’s SPRIM vehicle. Fully 81 percent of its portfolio is invested in secondaries. The vehicle had AUM of $1.4 billion as of end-July, affiliate title Private Equity International reported.
HarbourVest Global Private Solution SICAV seeks to invest 40-60 percent of its capital into secondaries, according to its website. The vehicle’s AUM sat at $835 million as of 1 January, PEI reported.
Ares Private Market Fund also invests heavily into secondaries with 98 percent of the vehicle’s $389.4 million in AUM deployed via the strategy.