Kayne Anderson Private Credit, a middle-market direct lending platform with $5bn in assets, has sold a passive minority stake in itself to Bonaccord Capital Partners, a subsidiary of asset manager P10 Inc, according to a report by Bloomberg.
The report quites Ken Leonard, Co-head of Kayne Anderson as saying in an interview that, with the private credit market in a “Sweet spot”, the Chicago-based platform intends to use proceeds from the transaction to accelerate its growth.
Average private credit returns, on an unlevered basis, currently stand at 12% to 13%, up from 7% to 8% in recent years, in part due to higher interest rates, said Leonard, who co-heads the business with Doug Goodwillie.
“In my 37-year career, I can’t recall investing in a market with as favourable risk-adjusted characteristics this one,” said Leonard.
Following the Bonaccord transaction, Leonard said Kayne Anderson will now be able to provide warehouse facilities for new investment vehicles, backstop lines for its business development companies and provide so-called seasoning for loans to offshore investors, a process that reduces tax implications, Leonard said.
The deal will also enable the firm to expand its origination capabilities and product offerings, and to tap retail channels to raise funds, as well as develop relationships with private equity firms that Bonaccord has minority stakes in, including Revelstoke Capital Partners and AE Industrial Partners among others
