Babson Capital Said to Raise $2 Billion for Private Loan Fundsby
Babson Capital Management LLC has raised more than $2 billion from institutional investors including sovereign wealth funds and family offices for its global private-loan strategy, according to two people with knowledge of the matter.
The U.S. asset manager closed its most recent round of fundraising after winning mandates from 20 institutions across Europe, the U.S. and Asia in the past 12 months, said the people, who asked not to be identified because the information is private. About $900 million has already been deployed, they said.
Firms like Babson and KKR & Co. are taking advantage of a pullback in bank lending by offering loans directly to private-equity firms that are on the lookout for acquisitions. Last year such funds raised a record $85 billion globally from institutional investors looking to generate yield from the private credit market.
Babson’s global private finance unit had about $3.8 billion in assets under management as of March 31, according to the company’s website. The unit’s strategy, which offers mezzanine and senior credit, targets a return of 2 percentage points more than the syndicated-loan market, the people said. A spokesman for Babson declined to comment.
Babson oversees about $223 billion in assets including $32.8 billion in private credit. It’s owned by Massachusetts Mutual Life Insurance Co.