Firms & Funds

AllianzGI, StepStone team up on mid-market lending push

-
private equity
Photo of growing plants on stack of coins courtesy of lovelyday12/iStock/Getty Images.
  • Loans are first lien, senior secured
  • Most portfolio companies sponsor-backed
  • Managed by AllianzGI’s US Private Credit Solutions

Allianz Global Investors and StepStone Group have announced the formation of a new lender to U.S. middle-market companies, AC Loan Sourcing. The portfolio is managed by AllianzGI’s US Private Credit Solutions team, with loans being sourced in collaboration with Citizens Bank.

John Corbett, portfolio manager at US Private Credit Solutions, called AC Loan Sourcing “a nice partnership that we’ve arranged with Citizens … Through the relationships that they have in their commercial middle-market banking and lending group, they have the ability to source loans for companies that they’ve banked and partnered with for years.”

Corbett, who led AllianzGI’s investment in the platform, said the team intends to maximize income flow to investors through lower administrative and origination expenses.

Portfolio companies are mostly private-equity-backed, and spread across a range of sectors including healthcare, industrials and consumer. The loans are first lien, senior secured. “At this point, we think that’s a good piece of the capital structure to be in,” said Corbett. “We look to take a prudent, conservative approach.” The portfolio is around 80 percent complete.

In a statement, StepStone partner Urs von Büren said the investment represented “a distinctive opportunity to gain instant exposure to a segment of the market that we believe is capable of generating attractive risk-adjusted returns.”

Action Item: Read the full announcement here.

Photo courtesy lovelyday12/iStock/Getty Images