Tennenbaum nears $1 bln for direct lending fund

  • Firm may hold second close by end of 2016
  • Credit-focused GP held first close for Fund VIII at $763 mln
  • CNO Financial bought GP stake in Tennenbaum in April

Tennenbaum Capital Partners has drawn about $1 billion in LP demand for TCP Direct Lending Fund VIII, with plans to wrap up the credit pool next year, according to sources.

The firm may hold a second close this year for Fund VIII, sources said. The exact fundraising target for the fund is unclear.

TCP Direct Lending Fund VIII held a first close at $763 million earlier this year. Over the summer, Tennenbaum  disclosed three investors and $190 million raised for Fund VIII, with a date of first sale of Aug. 15, a Form D filing showed.

A spokesman for Tennenbaum declined comment.

Overall, fundraising for credit strategies has remained healthy as institutions turn to direct lending to boost returns in a flat-interest-rate environment.

Earlier this year, the firm closed on $730 million for Tennenbaum Special Situations Fund IX.

Appearing at the PartnerConnect West 2016 conference in September, Paul Tseng, managing partner at Tennenbaum, said he’d seen more participation in second-lien and mezzanine debt deals from insurers and sovereign-wealth firms. He said the firm has been casting a wider net for loan originations but remains cautious. See related story.

In April Tennenbaum said it sold a noncontrolling minority stake in the firm to CNO Financial Group, the publicly traded holding company for Bankers Life and Casualty Co, Colonial Penn Life Insurance Co and Washington National Insurance Co. Terms weren’t disclosed.

In 2015, the firm hired John Mendell as a director focusing on developing current and prospective institutional-investor relationships. He previously focused on business development for Ares Management.

Action Item: Contact Tennenbaum: www.tennenbaumcapital.com/contact/

A snow-encrusted pine-tree branch tip is seen near Norden, California, on December 5, 2015. Photo courtesy Reuters/Max Whittaker