Audax Private Debt (“Audax”), a leading provider of financing solutions for middle market private equity sponsors, announced today that it successfully closed Audax Direct Lending Solutions Fund II, LP (“DLS Fund II”) with $3.0 billion of capital commitments. The new fund, which reached its hard cap, exceeded its fundraising target of $2.25 billion and, including targeted leverage, provides New York-based Audax Private Debt with $4.5 billion of total investable capital.
Audax is actively investing through DLS Fund II and has issued $1.6 billion of loan commitments to date. Consistent with the strategy of its predecessor, DLS Fund II provides senior secured unitranche and stretch senior financings. DLS Fund I, which is in its reinvestment period, closed in 2018 with $2.6 billion of investable capital. Inclusive of Audax’ inaugural DLS fund, the closing of DLS Fund II brings Audax’ total investable capital for unitranche financing to over $7 billion.
“We are extremely pleased to have again received broad investor interest in our Direct Lending Solutions strategy and want to thank our limited partners. We believe the demand for DLS Fund II reflects our excellent investing track record, our deep experience across multiple credit cycles, and our consistent underwriting approach in a wide variety of economic environments,” said Kevin P. Magid, President of Audax Private Debt. “Coupled with our other senior debt and junior capital funds, the expansion of our unitranche financing capabilities through DLS Fund II further positions Audax Private Debt as a lender of choice to private equity borrowers.”
DLS Fund II attracted commitments from a diverse mix of global institutional investors from the U.S., Canada, Europe, Asia-Pacific, the Middle East, and Latin America. Investors include leading pension funds, sovereign wealth funds, insurance companies, family offices, endowments and foundations.
The new fund reinforces Audax’ position as a stable source of debt capital within the middle market and is complementary to other financing solutions under the Audax Private Debt umbrella, including first lien, stretch senior, unitranche, second lien, subordinated debt and preferred equity, as well as equity co-investments. Since inception, Audax has invested over $34 billion across more than 1,200 companies in support of over 275 private equity sponsors. For over 20 years, the firm has focused on providing financing to companies with EBITDA of $10 million to $75 million.
“We look forward to building upon our longstanding relationships with financial sponsors, while forging new partnerships with private equity firms seeking a lender to support new platform acquisitions, catalyze portfolio company growth, or achieve liquidity events to crystallize value creation,” said Rahman Vahabzadeh and Steve Ruby, Co-Heads of Origination at Audax Private Debt. “The capital raised in DLS II will allow us to provide unitranche and stretch senior financing of up to $200 million per transaction. Historically, it’s in these types of environments — when capital has become constrained — that our value proposition as a sophisticated and thoughtful financing partner distinguishes our approach in direct lending.”