Fund manager PGIM has announced an expansion into private credit secondaries, planning to deploy up to US$1 billion in the next two years.
The firm said deal volume in the space is expected to exceed US$50 billion ($74 billion_ in the next three years.
It will focus on sourcing opportunities in direct lending as well as in opportunistic credit areas such as mezzanine and special situations, targeting both GP- and LP-led deals across the US and Europe with a particular focus on middle market transactions.
The initiative will be led by Alex Stuart, managing director and head of private credit secondaries, and Maelle Reichenbach, senior principal of private credit secondaries.
The initiative addresses growing market demand for liquidity solutions in private credit and reflects what PGIM believes is a natural evolution of its middle market direct lending business and its private equity secondaries business.
Matt Douglass, head of private credit at PGIM, said: “Private credit has evolved significantly in the half century that we’ve been operating in the asset class. The emergence of secondaries is a natural stage in that evolution.
“This expansion reflects our commitment to meeting the growing demand for innovative private credit solutions beyond primary markets. Our deep understanding of issuers and GPs across the middle market positions puts us in a strong position to deliver on transactions in this space.”
PGIM, which is the global asset management arm of Prudential Financial, currently manages over US$1.5 trillion in assets under management and has offices in 20 different countries.
Last November, State Street Investment Management announced it had taken a minority stake in private markets secondaries manager Coller Capital to collaborate on future products. According to State Street, the deal comes as secondaries are increasingly being viewed as a strategic component of asset allocation due to its ability to offer unique risk-return and liquidity characteristics.
Through this partnership, State Street IM said its clients will gain access to Coller’s private equity and private credit secondaries capabilities.
Meanwhile, the investment and relationship will support Coller’s long-term growth strategy and expand access to secondaries to a broader range of investors and markets.
