PNC Financial Services, one of the largest diversified financial institutions in the U.S., and the TCW Group, a global asset manager, partnered to deliver private credit solutions to middle market companies.

The PNC and TCW partnership formalizes and expands more than 15 years of collaboration between PNC and TCW, combining both institutions’ credit expertise: TCW’s 23-year track record of originating, underwriting and managing direct lending portfolios, and the strengths of PNC’s national client relationships, in addition to its middle market lending franchise. The new joint strategy will focus primarily on directly originated, senior secured cash-flow and asset-based loans to both sponsored and non-sponsored middle market companies.

“We are thrilled to partner with PNC to expand our direct lending capabilities and provide financing to a critical segment of U.S. companies, as well as offer a differentiated investment solution for clients,” Katie Koch, president and CEO of TCW, said. “PNC and TCW have a long history of developing creative solutions across a number of joint financings, and this partnership represents an exciting opportunity to capture significant market share of the expanding private credit market by leveraging the strengths of both our firms.”

“Combining the power and legacy of PNC’s broad lending capabilities with TCW’s private credit group will deliver significant benefit to companies seeking growth opportunities,” William S. Demchak, chairman and chief executive officer of PNC, said.

PNC and TCW will establish a team to manage all of the strategy’s investment activities including origination, underwriting and portfolio management. The platform is targeted to have $2.5 billion in investor equity capital available to invest in its first year, which will be supported by anchor investments from PNC and Nippon Life, TCW’s strategic partner and shareholder. Investment activity is expected to commence in the fall of 2024.

“We are very excited to announce this new business strategy, which represents a natural extension of TCW’s existing direct lending and rescue fund strategies with an opportunity to offer investors access to a broader segment of the middle market,” Rick Miller, chief information officer of TCW Private Credit and chair of the new joint private credit partnership, said.