Junior capital provider Penfund closes seventh fund at C$1.6bn

• Fund VII exceeded its original target of C$1.5 billion
• The vehicle’s broad product range and larger capital base will allow it to provide customized financing solutions of up to C$300 million per deal
• Most of Penfund’s deals involve partnerships with high-profile North American sponsors

Penfund, a Toronto-based junior capital provider to North American mid-market companies, said it recently closed its seventh fund, Penfund Capital Fund VII, securing about C$1.6 billion.

The amount exceeds the vehicle’s original target of C$1.5 billion.

Fund VII will maintain Penfund’s long-time strategy as a specialty lender, focusing on second lien, mezzanine, private high yield loans and other credit products. It will also co-invest with equity sponsors and may selectively complete stand-alone equity investments.

The vehicle’s broad product range and larger capital base will allow it to provide customized financing solutions of up to C$300 million ($220 million) per deal.

Most of Penfund’s deals involve partnerships with high-profile North American sponsors. Examples include Leonard Green & Partners, Hellman & Friedman, Genstar Capital, OMERS Private Equity, The Riverside Company and Flexpoint Ford.

“We are proud of Penfund’s long-standing partnerships with leading institutional investors and we are grateful for the confidence and trust they have placed in our team. In line with our prior funds, we will continue to follow the same conservative investment philosophy that emphasizes the preservation of capital across widely differing economic environments. Fund VII is well positioned to support private equity sponsors and borrowers through the currently challenging economic and capital market conditions,” said Penfund partner Richard Bradlow in a statement.

PJT Park Hill and Epsilon Underwriting & Issuing acted as placement agents for Penfund. Legal advice was provided by Stikeman Elliott and Goodwin Procter.