PGIM, the asset-management arm of Prudential Financial (NYSE:PRU), and LGT Capital Partners said Wednesday they backed a $680 million continuation vehicle run by Tree Line Capital Partners, giving existing investors a way to take liquidity while keeping the loans under Tree Line’s management.
The firms said the vehicle purchased a portfolio centered on senior secured, first-lien loans tied to more than 60 U.S. lower middle-market businesses across multiple industries.
The deal also extends PGIM’s push into private credit secondaries, after the manager said earlier this year it intended to put as much as $1 billion to work in the strategy over a two-year window.
The deal comes as the secondaries market has reached record levels.
Evercore estimated $121 billion of secondary transaction volume in the first half of the year, with more than half coming from GP-led transactions. Single-asset continuation vehicles accounted for roughly $34 billion, or 53%, of GP-led activity.
S&P Global Market Intelligence recently noted that growth in private equity secondaries is expected to “outlast the investor liquidity squeeze.”
Total secondaries deal value could exceed $250 billion in 2026, more than double the full-year total recorded as recently as 2023, Blackstone President Jonathan Gray said at a conference in June.
PGIM’s planned $1 billion allocation targets both GP-led and LP-led transactions spanning direct lending and opportunistic private credit, with an emphasis on middle-market deals in the U.S. and Europe.
LGT Capital Partners, which said it has been active in credit secondaries since 2009, served as co-lead investor and framed the transaction as a way to access a diversified pool of senior secured loans.
Felix Janssen, partner and co-head of private credit solutions at LGT Capital Partners, said: "LGT Capital Partners combines an established secondaries track record with deep credit underwriting capabilities, allowing us to evaluate diverse portfolios credit-by-credit, and structure solutions at scale. We believe this transaction demonstrates the strength of that approach and our ability to serve as a strategic capital partner in large-scale credit secondary transactions. Credit secondaries have become an increasingly important tool for managers and investors, and we see a deep and growing universe of opportunities."
Tree Line’s co-managing partners Tom Quimby and Jon Schroeder said: "The result of the transaction will contribute to Tree Line’s ability to offer attractive financing solutions to lower middle-market borrowers and sponsors. The Tree Line team has built its platform on a relationship-based approach, and we are excited about our next chapter of growth."
Campbell Lutyens served as financial adviser, while Morgan, Lewis & Bockius provided legal counsel to PGIM, the companies said.
More Firms Chase GP-Led Deals
The growth has prompted several major private equity firms and secondaries specialists to launch strategies targeting the segment.
ICG, Carlyle AlpInvest and Lexington Partners are among the larger players that have introduced products focused on single-asset continuation deals, although those firms generally pursue larger transactions, PitchBook noted.
Smaller platforms, including NorthSands Capital and Orchard Investment Partners, have also emerged in the space.
Meanwhile, Twin Bridge Capital Partners is targeting up to $600 million for a new private equity vehicle focused on secondaries. The Chicago-based fund-of-funds manager is raising the Twin Bridge Amplify Fund, the manager’s first vehicle dedicated specifically to the secondaries market.
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