Alternative investment firm Varde Partners has raised nearly $1.5 billion from institutional investors for asset-based lending through its Varde Asset Lending Fund II and related accounts and co-investments, it said on Thursday.
"The surge in demand for non-bank financing – an acceleration of a more than decade-long trend – underscores the need for private credit and magnifies already significant lending opportunities," said Brad Bauer, partner & co-chief investment officer at Varde Partners.
Loans from direct-lending funds often carry a higher interest rate than traditional bank debt, making them attractive for private capital providers. However, as credit conditions have tightened, and interest rates have risen, banks have also been seeking ways into the market.
Earlier this week, Wells Fargo WFC.Nteamed up with private equity firm Centerbridge Partners to launch a fund with a capacity to lend more than $5 billion to North American middle-market companies.
Varde provides loans and financing solutions for consumers, businesses and lenders. The firm invests across a range of industries, including specialty finance, commercial real estate and technology.