Investment strategy provides bespoke fund financing solutions to private equity and private investment vehicles in need of additional capital.
FORT WORTH, Texas, Nov. 19, 2018 /PRNewswire/ -- Crestline Investors, Inc. ("Crestline"), a credit-focused institutional alternative asset manager, today announced the closing of its first fund dedicated to its Portfolio Financing strategy, which is managed by Crestline's Fund Liquidity Solutions team. The Portfolio Finance Fund, and related managed accounts, secured $600 million of capital commitments, exceeding the fundraising objective. Investors in the strategy include leading public and private pension plans, endowments, wealth management platforms, and other institutional investors.
The new fund is the tenth in Crestline's series of opportunistic funds, which started in 2005 and have attracted more than $6 billion in client commitments to date across a variety of specialized strategies.
The Portfolio Financing Fund offers investors dedicated exposure to the same strategy that has been employed by Crestline since October 2016 in the form of managed accounts and co-investments. To date, the Crestline Fund Liquidity Solutions team, which is co-led by David Philipp and Amit Mahajan, has completed in excess of $580 million of transactions satisfying a range of borrower needs, including: acquisition financing, growth capital, debt refinancing, covenant breach cures, and accelerating distributions to investors.
The fund offers bespoke and flexible capital in a variety of structures, ranging from short term bridge loans to medium term fund financing solutions, to private equity funds and other private investment firms in need of additional capital. The strategy is particularly well-suited for investment vehicles that are liquidity starved yet asset-rich with sufficient remaining portfolio holdings to serve as an underwriteable borrowing base. This bespoke approach helps ensure these vehicles have access to new capital for opportunities they believe to be accretive or protective within their portfolio companies.
"This fund closing is the latest example of our commitment to being an innovator in the credit markets by identifying and pursuing high quality investment opportunities for our clients. Our Fund Liquidity Solutions team was purpose-built to execute this strategy, and includes investment professionals with backgrounds in structured finance, secondaries, restructurings, direct investing, valuations and credit markets," said Douglas Bratton, Managing Partner & CIO of Crestline.
"Private equity funds are designed to deploy capital only during their investment period. However, we have found a growing number of funds have residual holdings that would benefit from additional capital beyond this initial period. Since 2016, we have been working in collaboration with third-party managers to deliver accretive results for their investors. When we launched the strategy, most of our transactions were designed to provide last resort capital to protect NAV, but we have definitely seen an increase in transactions designed to enhance NAV. Managers are realizing they can add significant value throughout the post-investment period, especially if they have access to additional capital," said Philipp, a Senior Portfolio Manager for the fund.
"Many private equity funds have exhausted their ability to call investor capital and yet they still need additional capital to support existing portfolio companies or to achieve a realization event in the near term. Previous solutions to this problem were either costly, slow or cumbersome. Our Portfolio Financing Fund, by virtue of its flexible capital and structuring, has become a preferred solution for funds that can utilize existing portfolios as borrowing tools to secure much-needed incremental capital in a short time frame," said Mahajan, who is also a Senior Portfolio Manager for the fund.
For more information about Crestline's Fund Liquidity Solutions, please reach out to infoFLS@crestlineinc.com.
About Crestline Investors, Inc.
Crestline Investors, Inc., founded in 1997 and based in Fort Worth, Texas, is an institutional alternative investment management firm with approximately $10.8 billion of assets under management.1 Crestline specializes in credit and opportunistic investments, including financing and restructuring solutions for mature private equity funds. In addition, the firm manages a multi-PM equity market-neutral hedge fund, and provides beta and hedging solutions for institutional clients. Headquartered in Fort Worth, Texas, the company maintains affiliate offices in New York City, Chicago, London, Toronto and Tokyo. For more information, please visit www.crestlineinvestors.com.
1 Assets under management as of June 30, 2018.