PGIM expands opportunities for medium-sized businesses
PGIM has announced the launch of a new direct lending fund. The fund aims to provide a wide range of opportunities in the direct investment sector and beyond.
PGIM is the investment arm of Prudential Financial, an insurance company. Prudential Financial has a turnover of approximately US$1.4 trillion, confirming its strong position. The decision to create the new PGIM fund was driven by market conditions. There is a high demand for instruments that will meet investors’ needs.
Here is what we know about the new PSLO II fund:
– its activities focus on medium-sized businesses;
– the fund has raised more than US$4.2 billion through equity investments;
– the amount raised exceeds the investment in the previous fund, which opened in 2022, by 75%.
PSLO II is not just a direct lending instrument for financing company buyouts. Rather, it is designed to support businesses from various sectors of the economy. The fund will provide secured loans to businesses with and without sponsors. It will cover North America, Europe, and Australia.
The instrument relevance
Matt Harvey of PGIM observed steady growth in the direct lending sector. The key drivers here are deals supported by sponsors. However, these opportunities are no longer sufficient for effective diversification and large-scale financing.
Harvey also mentioned that 90% of the direct lending market is occupied by companies without direct investments. For instance, approximately 200,000 medium-sized businesses operate in the U.S. Of these, only 10,000 are involved in direct investments.
Traditionally, this lending market has relied on a flow of direct investment deals to obtain loans. In recent years, however, the sector has experienced a decline in such transactions. The situation is further complicated by intense competition from banks. These factors have limited opportunities for businesses and reduced options for obtaining private loans. These trends have attracted the attention of companies that provide direct financing services.
PSLO II uses a flexible business model that allows it to provide reliable support to companies with different profiles and needs. PGIM intends to offer favorable terms and develop individual strategies for each client.
About the company
PGIM is one of the world’s largest management companies. It provides services to both the private and public sectors. PGIM offers:
– fixed income management;
– real estate investments;
– direct lending and other services.
The company guarantees high results thanks to a well-thought-out financial strategy and an effective risk management system.
