Benefits of Junior Debt
Junior debt, or mezzanine capital, often serves a significant role in leveraged buyout (LBO) and sponsor-led acquisition financings. The market for junior debt is favorable as sophisticated borrowers increasingly seek highly customized solutions with trusted lending partners like Portfolio Advisors. Traditional lending institutions (banks) have reduced junior debt lending due to regulatory constraints, enhancing the market opportunity. Junior debt capital is common in the middle market, where we believe there is potentially lower competition, greater information access, and the ability to customize transaction structures.
Portfolio Advisors junior debt investment team has a long history working in the U.S. private markets, having a track record extending back to 1999. Prior funds were managed at Credit Suisse under the DLJ Investment Partners name. The team typically leads junior debt financing solutions for private equity sponsor-backed companies. Key characteristics of our approach include the following:
- Middle-Market Focus: Generally $15-75 million investments in companies with more than $10 million of EBITDA.
- Generalist Approach: The team seeks to build a diversified portfolio through a sector agnostic investment approach.
- The Portfolio Advisors Advantage: Portfolio Advisors’ deep relationships with private equity sponsors facilitate high-quality transaction sourcing, preferential information access and a partnership approach.
- Experienced and Dedicated Team: The Portfolio Advisors team brings industry experience and has decades of private junior credit underwriting experience.
- Company Size: Minimum EBITDA typically $10 million
- Investment Size: $15 million to $75 million
- Geography: North America