Manulife Investment Management Announces Close of $752 Million Manulife Capital Partners VII, L.P.

Rhea-AI Summary

Manulife Investment Management closes Manulife Capital Partners VII, a US$752 million private credit fund focusing on high yield with equity upside for U.S. middle market companies. The fund attracted a global investor base and aims for double-digit yields.

Financial Analyst

The final closure of Manulife Capital Partners VII, a private credit fund of US$752 million, signifies a substantial capital mobilization effort within the private credit sector. The fund's focus on junior credit capital for U.S. middle market companies aligns with a growing trend in private financing where investors seek higher yields coupled with equity upside potential.

Investors should note the fund's strategy to target investments in companies with more than $20 million in EBITDA across various industries, which implies a careful selection process aimed at identifying firms with stable cash flows and potential for growth. The diversification across sectors such as Business Services, Industrial Manufacturing, Aerospace & Defense and Building Products could mitigate sector-specific risks and contribute to the fund's overall stability.

The commitment from Manulife itself to the fund underscores the confidence of the fund managers in their investment strategy. This co-investment could be perceived as a positive signal to other investors regarding the fund's prospects.

Market Research Analyst

Manulife Investment Management's announcement reflects the broader industry's appetite for alternative investment vehicles that offer a balance of yield and growth potential. With the private credit market expanding, institutional and private investors are increasingly drawn to opportunities outside of traditional public equity and bond markets.

The fund's strategy to deploy capital towards a mix of subordinated and second-lien debt, along with structured and common equity, suggests a nuanced approach to capital structuring that can appeal to investors seeking diversification in their portfolio. The potential for double-digit yield, as mentioned by the co-head of junior credit, indicates a competitive return profile that could attract yield-seeking capital in a low-interest-rate environment.

Private Equity Expert

Manulife's historical deployment of over US$3.3 billion into 126 companies showcases a veteran team with significant experience in the private equity space. This track record is a critical factor for investors evaluating the fund's potential performance. The integration of private equity and credit teams to leverage market knowledge and resources could offer a strategic advantage in identifying and capitalizing on investment opportunities.

The fund's global investor base, including both institutional and private capital investors, reflects the increasing globalization of private equity. The ability to attract a diverse pool of investors is indicative of Manulife Investment Management's strong reputation and the perceived quality of their investment opportunities.

US$ unless otherwise stated                                     

BOSTON, March 5, 2024 /PRNewswire/ - Manulife Investment Management announced today the final close of Manulife Capital Partners VII, L.P. (MCP VII or the "Fund"), a US$752 million private credit fund.

The Fund seeks to invest junior credit capital in U.S. middle market companies to target high yield with equity upside, providing contractual cash coupons and capital appreciation for investors. MCP VII is backed by a global investor base of institutional and private capital investors including a capital commitment from Manulife.

"We are pleased to have attracted interest in the Fund from a highly diversified investor base including both institutional and private capital investors who are looking for an opportunity to participate in company value creation," said Vipon Ghai, global head of private equity and credit, Manulife Investment Management. "The successful fundraise demonstrates the strength and expertise of our team, the value we bring to our relationships with our sponsors, and the potential opportunities for our investors."

"Our investment approach includes a target mix of subordinated and second-lien debt and structured and common equity that allows for meaningful participation in growth that is balanced by the potential for double digit yield," said Josh Liebow, CFA, co-head of junior credit, Manulife Investment Management.

"We are excited to continue the strong legacy of bringing investors high yielding risk-adjusted unlevered returns. Since inception, our veteran team has deployed more than US$3.3 billion into 126 companies as a result in part of their experience and ability to bring flexible capital to a selective portfolio of companies that meet our investment criteria," added Matt Szwarc, co-head of junior credit, Manulife Investment Management.

Mr. Liebow and Mr. Szwarc serve as Portfolio Managers of the fund. In addition to their leadership, the junior credit investment committee utilizes an integrated approach across the private equity and credit teams to share market knowledge and resources from the broader platform. The Fund will focus on 20 -30 portfolio companies with more than $20 million in EBITDA to include Business Services, Industrial Manufacturing, Aerospace & Defense, Building Products, among others.

Manulife Investment Management's global private equity and credit platform currently has more than US$25 billion in assets under management and unfunded commitments across five verticals: primary private equity funds, equity co-investments, GP-led secondaries, senior credit, and junior credit. Its integrated GP-centric platform possesses a strong network of 200+ sponsor partners. Since 1998 Manulife Investment Management has selectively made junior credit investments in market leading North American middle market companies by leveraging its private equity sponsor relationships for high-quality deal flow.

About Manulife Investment Management

Manulife Investment Management is the brand for the global wealth and asset management segment of Manulife Financial Corporation. Our mission is to make decisions easier and lives better by empowering investors for a better tomorrow. Serving more than 17 million individuals, institutions, and retirement plan members, we believe our global reach, complementary businesses, and the strength of our parent company position us to help investors capitalize on today's emerging global trends. We provide our clients access to public and private investment solutions across equities, fixed income, multi-asset, alternative, and sustainability-linked strategies, such as natural capital, to help them make more informed financial decisions and achieve their investment objectives. Not all offerings are available in all jurisdictions. For additional information, please visit manulifeim.com.

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SOURCE Manulife Investment Management

What is the name of the private credit fund mentioned in the press release?

The private credit fund mentioned in the press release is Manulife Capital Partners VII, L.P. (MCP VII).

What is the total amount of the private credit fund?

The total amount of the private credit fund is US$752 million.

What type of companies does the fund target?

The fund targets U.S. middle market companies in sectors like Business Services, Industrial Manufacturing, Aerospace & Defense, and Building Products.

What is the investment approach of the fund?

The fund's investment approach includes a mix of subordinated and second-lien debt, structured and common equity to balance growth participation with potential double-digit yield.

How much has the team deployed into companies since inception?

The team has deployed more than US$3.3 billion into 126 companies since inception.