Particularly enticing would be one that is entering its second decade, such as Chicago-headquartered Monroe Capital.

Earlier this week, French investment firm Wendel announced the acquisition of a 75% stake in Monroe. Wendel is planting its flag in the alternatives space — the asset manager acquired a majority stake in European private equity firm IK Partners.

Wendel is not alone. Large asset managers are acquiring private credit firms or partnering up. Case in point was the alliance between Citi and Apollo, which announced a $25bn joint private credit program very recently. But the last couple of years has seen TPG buy Angelo Gordon, Varagon acquired by Man Group, Prudential purchase Deerpath, and Victory Park acquired by Janus Henderson.

Plus BlackRock, even with an existing direct lending business, is reportedly interested in acquiring HPS.

It’s hard to assess the impact these deals have on the overall competitive landscape. As private credit has matured, the market has split into multiple segments, and firms can specialize. Apollo and HPS like the upper middle market, Monroe and Deerpath have a niche in the lower middle market. Victory Park, meanwhile, is a big player in asset-based lending. These firms are not necessarily in direct competition.

Of course, some lenders dabble in both the upper and lower middle market, but asset managers are choosing their spots. Corporate direct lending is not one single blob, for the dynamics in the upper and lower middle differ along the lines of return levels and covenant packages on deals.

But what is the benefit for lenders? Growth, ultimately, and the freedom to continue to do what they do best. With the Wendel acquisition, the French investment giant will provide up to $800m to fund new initiatives for Monroe. Wendel will also fund a GP commitment of up to $200m, bringing Wendel’s total investment in Monroe funds to $1bn as part of this deal.

With so many names in private credit today, scale is becoming an increasingly important question. Hedge funds have tried to get into the party, and Nomura-backed Corinthia is the big news story of the year, which instead of buying a firm, acquired a team instead.

The Monroe-Wendel deal is expected to close in the first half of 2025, but the story may not end here. Wendel said in a statement that it is in talks with fellow French asset manager AXA IM Prime for an investment of up to $50m as a minority shareholder in Monroe. Another asset manager afraid of missing out on the private credit boom.

This week in 9fin

Proskauer’s private credit default index dips below 2% in Q3

Lycra targets $350m private credit deal to partly refi debt

Ares record credit secondary deal includes buying stakes in its own funds

Pure Fishing close to netting new funding from private credit lenders

AffiniPay secures $1.5bn loan from private credit lenders

LA pension fund commits $200m to two private credit managers

Evercore selling private credit fund stakes with NAV over $3bn

What’s in market

Amerit Fleet Solutions — the Brightstar-backed maintenance provider for delivery vehicles is exploring a potential sale with the help of advisors Moelis & Company

GoHealth — the public company is seeking a refinancing of around $500m in privately placed debt

Anaqua — the Astorg-backed IP software firm is up for sale with the help of Jefferies and Arma Partners

MRI Software — in the market for a repricing of its existing $2.5bn debt and is seeking a $250m incremental loan for additional M&A

From around the web

Private credit valuations worry world’s financial watchdogs (BBG)

Watch out: Wall Street is finding new ways to slice and dice loans (WSJ)

iCapital raising $200m for private credit fund -sources (Citywire)

Investors want more exposure to private credit, Goldman says (BBG)

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