Len Tannenbaum is preparing to raise a new private debt fund to capitalise on dislocation in the $1.8tn private credit market, according to a report by Bloomberg.
Tannenbaum, who sold credit-focused Fifth Street Asset Management to Oaktree nearly a decade ago, is sounding out family offices for the new vehicle. His own family has pledged up to $50m, with a first close targeted for early October.
The fund will be launched under Tannenbaum Capital Group, the alternative investment firm he founded with his wife and two sons in 2020, and is expected to convert into a business development company. It has not yet been decided whether the BDC will be publicly traded or private.
Tannenbaum said recent liquidity pressures in private credit are creating opportunities for investors, particularly in the lower middle market. He said outflows could lead to wider spreads, stronger covenants and more attractive deal terms.
He also warned that smaller software companies could face refinancing pressure over the next year, although he said private equity sponsors are likely to absorb the initial strain before debt funds face a broader reckoning.
