Sound Point Capital Management, a global alternative credit manager, closed Strategic Capital Fund III (SCF III) with $1.1 billion in capital commitments, exceeding both its first and final close targets of $500 million and $1 billion, respectively. Sound Point is targeting a final close of SCF III by year-end 2025 with a hard cap of $1.5 billion.
To date, SCF III has received commitments from a diverse range of institutional investors, including insurance companies, public and private pension funds, asset managers and family offices based across North and Latin America, Europe and Australia. Notably, over 50% of first close commitments came from insurance companies. Additionally, the fund received a re-up rate of 100% from institutional investors in its predecessor, Strategic Capital Fund II (SCF II), with several investors significantly upsizing their commitments.
The $1.1 billion in commitments raised to date represents double the amounts raised for each of SCF III’s predecessors, SCF I and SCF II, which closed in 2018 and 2022, respectively, with $492 million and $514 million in commitments.
SCF III seeks to originate proprietary, first-lien capital solutions for primarily U.S. corporate borrowers requiring bespoke, transitional capital. Leveraging the full scale of Sound Point’s large and diversified credit platform, the strategy provides short-maturity loans backed by collateral that can be converted to cash relatively quickly, including accounts receivable, equipment, inventory and other high-quality assets.
“Borrowers needing transitional capital are increasingly turning away from commercial banks and towards firms like Sound Point for reliable, tailored financing solutions,” Marc Sole, deputy chief investment officer of Sound Point and co-portfolio manager of the capital solutions group, which manages the fund, said.
“We owe our track record in part to our originations, enabling our team to continue to capitalize on long term strategy tailwinds, like banks moving away from this type of lending,” Morgan O’Neill, co-portfolio manager of the capital solutions group, said.
“We are delighted and grateful for the support that Strategic Capital Fund III has received from investors at its first close,” Stephen Ketchum, Founder and CEO of Sound Point, said. “We believe the Sound Point platform is perfectly suited to generate an attractive pipeline of alpha-generating asset-backed loans. The strong reception of SCF III, particularly from existing investors, is testament to this and we intend to deploy our investors’ capital to take advantage of favorable market opportunities for this strategy.”
