Kayne Anderson, a business development company externally managed by its investment adviser, KA Credit Advisors, an affiliate of Kayne Anderson Capital Advisors, invested in SG Credit Partners, a national credit platform focused on the lower middle market to complement KBDC’s middle market investing strategy.
With offices in Newport Beach, Santa Monica, Atlanta, Boston, and Chicago, SG Credit plans to use its expanded capital base to grow existing verticals and develop adjacent businesses.
The investment will be structured as an $80 million term loan facility, $34 million delayed draw term loan facility and $12 million common equity investment. KBDC anticipates that its debt investment in SG Credit will be immediately accretive to earnings in 2025. KBDC will also be a significant minority shareholder in SG Credit following the closing of the transaction.
“This is a key strategic opportunity for KBDC and highlights our commitment to growing our portfolio with value-enhancing investments,” Doug Goodwillie, co-CEO of KBDC, said. “SG Credit’s unique lower middle market lending platform is highly complementary to our business and will further enhance the returns of KBDC’s diversified portfolio.”
“There have been a number of highly successful investments by BDCs and credit managers into asset-based platforms and finance companies in the past few years,” Frank Karl, senior vice president of KBDC, said. “We have known the team at SG Credit for many years and they have delivered a strong track record of returns for their investors. We think that their investment culture is well-aligned with KBDC’s and are excited to partner with the team to provide a greater breadth of financing solutions to our clients.”
“We appreciate Kayne Anderson’s confidence in SG Credit,” Mack McNair, chairman of SG Credit, said. “Their investment, combined with continued support and incremental investment from 4612 Group and The Cynosure Group, is a validation of the business we are building with Marc Cole, Charlie Perer, Andrew Hettinger and the entire SG Credit team. With this investment, SG Credit is well-positioned in its pursuit of sound, profitable, growth as a leading multi-product credit platform serving the lower middle market.”
“We are proud and excited to partner with a firm of the caliber and history of Kayne Anderson,” Marc Cole, co-founder and CEO of SG Credit, said. “This collaboration will not only support our growth with additional capital but also enable us to offer innovative, value-added financing solutions to a wider range of companies.”
Fenchurch Advisory Partners is serving as financial advisor and Mayer Brown is acting as legal advisor to KBDC. Solomon Partners is serving as financial advisor and Greenberg Traurig and Brenner, Saltzman & Wallman are acting as legal advisors to SG Credit.
