Principal Asset ManagementSM doubled its direct lending committed capital in 2022, increasing its foothold in the middle market. The direct lending team, now in its third year of business, has closed on 85 transactions since inception, representing $1.6 billion of committed capital.
"Current market conditions present an attractive opportunity for investors as market volatility and economic uncertainty contribute to tighter credit conditions which favors direct lending," said Tim Warrick, managing director, alternative credit, Principal Asset Management. "Through the relationships we have cultivated with private equity sponsors and key sources of non-sponsored deal flow, we were able to meet demands of our clients and deploy capital on pace to achieve our goal of $1.6 billion in cumulative committed capital since inception."
Transactions completed in 2022 showcased the flexibility that the Principal® direct lending team offers sponsor-backed and non-sponsored middle market businesses, featuring strong activity across a variety of financing solutions that primarily supported leveraged buyouts and add-on acquisition financings throughout the year. Sponsors are continuing to tap Principal to lead their financings, as the number of deals Principal led this year increased 140% compared to 2021 lead agented closings.
Principal continued to expand its direct lending team in 2022 with several key senior hires that further built out the originations, business development and underwriting efforts. Kyle Vanourny joined as head of business development/capital raising. Vanourny, who joined from BlackRock Alternatives Solutions, focuses on growing and enhancing the team's relationships with institutional investors. Jared Talisman and Jeff Milkie both joined as managing directors focused on non-sponsor originations, and Nick Piccirillo joined as a director focused on sponsor originations in the northeast. Talisman, Milkie, and Piccirillo join other managing directors of the originations team consisting of Doug Koch, Brian Miazga and Brian Polomsky. In addition, Principal added several senior underwriters throughout 2022 with extensive experience across key industry verticals, joining the managing directors of the underwriting team, Matt Darrah, Russ Rowley and Joe Sileo.
The Principal direct lending team now includes 31 highly skilled professionals with experience across various sectors. Principal invests in privately negotiated debt transactions with both sponsor-backed and non-sponsored middle market companies throughout North America that typically have $5 million or more in EBITDA.
"2022 was an extremely successful year for our growing platform, as we maintained a flexible approach tailored to our sponsor's financing needs. Market conditions throughout the year, coupled with our expansive offering, allowed us to not only increase share with our existing client base, but also expand considerably with new relationships," said Brian Polomsky, managing director, originations.
Read more on the team's quarterly outlook for private credit and visit Principal Asset Management for more about the team.
About Principal Asset ManagementSM
With public and private market capabilities across all asset classes, Principal Asset ManagementSM and its investment specialists look at asset management through a different lens, creating solutions to help deliver client investment objectives. By applying local insights with global perspectives, Principal Asset Management identifies distinct and compelling investment opportunities for more than 1,100 institutional clients in over 80 markets.1
Principal Asset Management is the global investment solutions business for Principal Financial Group® (NASDAQ:PFG), managing $484.6 billion in assets1 and recognized as a "Best Places to Work in Money Management2" for 11 consecutive years. Learn more at www.PrincipalAM.com.
[1] As of September 30, 2022
[2] Pensions & Investments, "The Best Places to Work in Money Management", December 12, 2022.
The recent transactions profiled above are intended to demonstrate the application of Principal direct lending investment strategy and represents middle marketing lending transactions previously entered by Principal alternative credit. There is no guarantee that any future transactions entered will have the characteristics like the deals profiled above.
©2023 Principal®, Principal Financial Group®, Principal Asset Management, and Principal and the logomark design are registered trademarks and service marks of Principal Financial Services, Inc., a Principal Financial Group company, in various countries around the world and may be used only with the permission of Principal Financial Services, Inc.
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