Crestline raises $1bn for fund finance

Portfolio Financing Fund II does preferred equity- and NAV-based lending deals for funds in the private equity, real estate and infrastructure markets.

Fort Worth-headquartered Crestline Investors has closed its second vehicle dedicated to fund finance.

The credit manager raised $1 billion for Portfolio Financing Fund II, which makes preferred equity- and NAV-based lending investments in funds in the private equity, real estate and infrastructure markets, according to a statement.

“Recent market environments have created dislocations and opportunities across the private markets,” said Amit Mahajan, managing director and co-head of Crestline’s Fund Liquidity Solutions Group. “NAV loans and other fund financing products have increasingly become a valuable and accepted portfolio management tool for sponsors and their LPs.”

Fund II came to market in May 2020. Its target is not clear. Crestline’s 2018-vintage predecessor collected $597 million against a target of $500 million by final close in November 2018.

San Jose Federated City Employees’ Retirement System invested in both funds, according to the pension’s website.

Akin Gump advised on the fundraise.

In June, Crestline promoted Dave Philipp, the co-head of the Fund Liquidity Solutions Group, to partner, Secondaries Investor reported. The team originally focused on underperforming funds before broadening to include mature and successful funds.

The team has closed 38 transactions with more than $1.5 billion in commitments through commingled vehicles, separately managed accounts and co-investment funds, the statement said.

There was $7.8 billion of preferred equity transaction volume in 2020, compared with $3.7 billion the year before, according to investment bank Evercore.

In December, Secondaries Investor reported that AlpInvest Partners was to launch a Strategic Capital fund, becoming the first of the large secondaries buyers to do so. The Carlyle Group subsidiary has already backed strategic capital deals out of a $1 billion pool of separately managed accounts.