Sixth Street closes second European direct lending fund on €1bn

The firm's direct lending strategy was first founded in North America in 2011 and expanded to Europe in 2015.

Specialty Lending Europe I closed on €800m and, as of 30 June 2020, had invested €946m across 18 companies, generating a net IRR of 11.7%.

No placement agent was used for the fundraise.

Sixth Street declined to comment.

Investors
The Public School Employees' Retirement System was considering a $125m commitment in the fund, according to a public investment memorandum; however, the investment has not been confirmed.

Investments
The firm is actively investing the fund, and has committed to five investments. The fund focuses on mid-market and growth-stage companies, both with and without sponsors, with enterprise values of €50m-1.5bn.

To date, the firm has transacted in nine European countries since 2015 and aims to invest in the UK, western Europe and the Nordic region. It targets investments that are first lien, floating rate and call-protected with firm covenants, according to a public investment memorandum.

Between 60-75% of investments from the fund are expected to be concentrated in senior secured debt, while the fund may also invest 20% of its capital in secured mezzanine investments and up to 20% of its capital opportunistically in structured equity or equity co-investments. Sixth Street also provides life sciences royalty financing, retail asset-backed lending and bespoke debt and equity capital solutions.

People
Sixth Street – Joshua Easterly (co-founder, co-president); Michael Griffin (partner).

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• Topics
• Funds
• Debt
• UK / Ireland
• United Kingdom