Oversubscribed fundraise highlights growing interest in lower middle market private credit opportunities
HOUSTON, May 19, 2022–(BUSINESS WIRE)–Stellus Capital Management, LLC (“Stellus” or the “Firm”), a leader in middle market direct lending, today announced the final close of Stellus Credit Fund III (“SCF III” or “the Fund”). The Firm materially exceeded its target fundraising goal with approximately $1.8 billion of investable capital including target leverage, capital commitments to SCF III, investor-specific vehicles, and a newly launched private Business Development Company (Stellus Private Credit BDC (“SPBDC”). SCF III, the successor to Stellus Credit Fund II (a $478 million fund closed in September 2018), closed on March 25, 2022 and has already invested in 36 portfolio companies.
As part of the Firm’s focus on offering diverse options to meet investors’ structural needs, Stellus raised $225 million of anchor capital for Stellus Private Credit BDC, a private business development company regulated under the Investment Company Act of 1940, as amended. This new, evergreen vehicle serves accredited investors directly and through their registered investment advisors (RIAs), investing parallel with other Stellus funds in the same middle market, direct lending strategy successfully implemented over the last 18-years.
Similar to its predecessor funds, SCF III and SPBDC are focused on identifying and pursuing private credit opportunities, originated and underwritten by Stellus, in a diverse range of industries in the United States and Canada. Stellus focuses on building a broad portfolio of direct lending investments in industries such as Business Services, Consumer & Retail, Healthcare, Industrials, and Media & Technology.
SCF III and SPBDC received commitments from new and existing institutional and high-net-worth investors worldwide, including leading public and private pension plans, insurance companies, foundations, family offices, global investment banks, consultants, and other institutional investors.
“The overwhelming interest in SCF III and Stellus Private Credit BDC is a testament to our long-term track record of success and investors’ confidence in our understanding of this increasingly important marketplace,” said Robert T. Ladd, Managing Partner, Stellus Capital Management. “With significant dry powder, we’re excited about the opportunity to utilize our robust origination capabilities, taking advantage of a strong private credit pipeline to provide investors with attractive risk-adjusted returns relative to other asset classes.”
With more than 300 combined years of principal investing experience and an 18-year track record, Stellus is one of the middle market’s most experienced private credit investors. In addition to SCF III and SPBDC, the firm is currently making investments out of Stellus Capital Investment Corp. (NYSE: SCM), and certain investor-specific vehicles. Founded and wholly owned by its partners, Stellus manages approximately $2.6 billion in assets.
About Stellus Capital Management
Stellus was founded in 2012 and formed in conjunction with the spin-out of the Direct Capital Unit of the D. E. Shaw group. Stellus’ senior team helped create the Direct Capital Unit in 2004 and has been investing together in the middle market for 18 years. Since 2004, the Stellus team has deployed over $8 billion into more than 350 middle market companies, developing a broad and deep expertise in this segment of the private investing market. Stellus currently has approximately $2.6 billion in assets under management, with offices in Houston, TX, the Washington, D.C. area, and Charlotte, NC. Learn more at www.stelluscapital.com.
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