Crestline Investors, a global alternative investment manager, launched Crestline Lending Solutions Fund (CLSF), a perpetual private BDC that utilizes the firm’s longstanding private credit expertise seeking to deliver income and incremental alpha through a focus on core and lower middle market direct lending as well as tactical allocations to additional forms of private credit.
CLSF is Crestline’s first BDC and commingled perpetual vehicle, representing a significant step forward in how the firm tailors its product-suite to attract new investors, including the wealth channel.
“We recognize the importance of meeting investors where they are, regardless of channel. This will continue to be a point of focus in this next phase of growth,” Tom Bavin, co-head of Crestline’s client partnership group.
“The largest perpetual BDCs face significant overlap in the portfolios, leading to substantial private credit ‘beta’ across these vehicles,” Chris Semple, co-head of U.S. corporate credit at Crestline and CEO of CLSF, said. “We believe our focus on the lower and core middle market, as well as tactical allocations to other forms of private credit, can provide investors with either an attractive alternative or complement to their existing perpetual BDC holdings.”
CLSF is also structured to support investor confidence that the strategy is able to remain consistent over time as it can draw investor capital over time.
“We’ve seen other BDCs become a victim of their own success, they can’t deploy the capital quickly enough, given the demand from investors,” Semple said. “The result is a focus on larger deals that are highly competitive and where the lender has less pricing and negotiating power. We’d rather take a measured pace to growth to enhance our ability to deliver alpha to our investors.”
CLSF will leverage Crestline’s cross-platform synergies to seek enhanced returns in direct lending by focusing on core and lower middle-market opportunities that typically offer additional spread and enhanced structural protection compared to upper middle-market opportunities.
Keith Williams, chief investment officer of Crestline, said, “We’re very proud of this recognition as it’s a testament to the entire Crestline team and platform. It also reflects our commitment to offering a differentiated product in an increasingly commoditized asset class.”
