Golub Capital Raising $500M For Lending

Firm: Golub Capital Inc.

Target: $500 million

Fund: Golub Capital Partners VIII LP

Amount Raised: $36.4 million

Fund: Golub Capital International Ltd

Amount Raised: $147.7 million

Placement Agent: None

Golub Capital Inc. has closed on more than $180 million in investor commitments as the firm gears up for a formal fundraising drive in the fall. The New York leveraged finance lender has raised $36.4 million domestically and $147.7 million from international investors, regulatory filings showed.

The overall goal is to raise $500 million for Golub Capital Partners VIII LP, the latest fund in the firm’s flagship series that dates back to 2001, according to a person familiar with the firm’s plans who asked not to be identified discussing fundraising while the firm is in the market.

Fund VIII is expected to be similar in size to its predecessor, which the firm closed in 2011. Golub Capital is expected to kick off formal fundraising before Labor Day and could wrap the effort by mid-2013, the person said.

Debt funds have proven popular with investors who seek higher returns in a low interest rate environment. The Golub Capital filings represent a pair of funds designed for domestic and international LPs, which may face different tax considerations in their investing decisions. The domestic vehicle, which carries the Fund VIII banner, has raised $36.4 million from 48 investors, while the other, the Cayman Islands domiciled Golub Capital International Ltd, has raised $147.7 million from 20 investors, the filings showed.

Golub Capital expects the new fund to be oversubscribed and is setting aside some portion of the fund for new investors, the source said. These funds will act as “feeder funds” for a series of leveraged financing facilities, to carry 2:1 leverage ratios, so the anticipated $500 million fundraise will provide the firm with $1.5 billion in additional lending capacity.

Golub Capital had $2 billion in gross originations last year, a figure representing all new loans before deducting payoffs from older, existing loans, the source said.