The asset management arm of French multinational bank BNP Paribas is targeting a €1bn ($1.1bn) fundraise for a new direct-lending fund that will focus on medium-sized businesses, and will differ from the bank’s other private credit facilities by offering unitranche loans, according to a report from Bloomberg.
The report cites people with knowledge of the matter as revealing that BNP Paribas is in talks to use cash from its balance sheet for the fund, as well as money from external investors.
The bank’s existing private credit funds only provide senior debt; this is prioritised in the event of bankruptcy and carries a lower interest rate than junior loans.
The fund’s team will be led by Christophe Carrasco, BNP Paribas’s Head of SME Lending.
Traditional players like The Goldman Sachs Group and Morgan Stanley have gained a foothold in the booming $1.7tn private credit market through their asset management units, their competitors being specialised firms. Goldman Sachs has raised more than $15bn for a private credit fund, while Morgan Stanley is working to raise a new private credit fund between $4bn to $5bn.