US private equity firm TPG is to list its mid-market lending unit, TPG Specialty Lending (TSL).
It will operate as a business development company (BDC), a listed investment vehicle targeting small and medium-sized enterprises, paying out the bulk of its profits as dividends.
TSL primarily provides senior secured loans and, to a lesser extent, originations of mezzanine loans and investments in corporate bonds and equity securities, in companies with EBITDA between $10m and $250m. It was cornerstoned with a $117m commitment from TPG, raising a total of $1.5bn in total from LPs including Oregon Public Employees Retirement Fund and the State of New Jersey Common Pension Fund, according to Reuters.
It is part of TPG’s Special Situations Partners platform, which has over $6bn of assets under management. As of 30 September 2013 its investment portfolio consisted of 29 investments in 25 portfolio companies with an aggregate value of $889.3m.
Proceeds from the listing will be used for paying down debt, with the remainder going towards investment, it said
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