Churchill closes junior capital fund III at $1.54 billion

Churchill Asset Management closed its third junior capital opportunities fund at $1.54 billion, more than 50% above its $1 billion target, Alternative Credit Investor reported.

The final close is the largest in the firm's junior capital opportunities program, Churchill said. It more than doubles the $737 million raised by its predecessor. The fund lends junior debt to US mid-market companies owned by private equity firms.

For allocators weighing junior capital, the fund is now closed to new commitments, and $665 million of the $1.54 billion, or 43%, was raised through rated feeder structures designed for insurance investors.

About $875 million came from a global group of pension funds, insurers, asset managers and family offices.

Churchill said the fund has so far deployed around $600 million across 44 portfolio companies, alongside 30 private equity firms.

Churchill is pitching its dual role as a buyer of private equity funds and lender to their portfolio companies as a sourcing advantage. "Our approximately $14 billion in private equity fund commitments, combined with longstanding sponsor relationships, provide us with a differentiated sourcing advantage," said Derek Fricke, head of direct investments at Churchill.

Churchill, the US asset management arm of Nuveen Private Capital, has invested more than $10 billion across over 290 junior capital transactions since 2011 and has more than $66 billion in committed capital.

As Private Wealth Daily previously reported, Churchill has argued that emerging private equity managers remain overlooked, and those relationships sit in the same sponsor universe the junior capital team lends against. Churchill has roughly $940 million of the fund left to deploy.