PNC and TCW Team Up to Deliver Private Credit Platform – Finovate

• PNC and TCW have partnered to deliver a private credit solution.
• The solution will leverage TCW’s loan origination, underwriting, and portfolio management expertise and will tap PNC’s extensive client relationships.
• The two will offer directly originated, secured cash-flow and asset-based loans to middle market companies.

Financial services company PNC and TCW, a leading global asset manager have teamed up this week to deliver a private credit solution to middle market companies.

The two will leverage TCW’s loan origination, underwriting, and portfolio management expertise and will tap PNC’s extensive client relationships. “We are very excited to announce this new business strategy, which represents a natural extension of TCW’s existing Direct Lending and Rescue Fund strategies with an opportunity to offer investors access to a broader segment of the middle market,” said CIO of TCW Private Credit and chair of the new joint private credit partnership Rick Miller.

The two will offer directly originated, secured cash-flow and asset-based loans to middle market companies, whether or not they have private equity or venture capital backing. Together, PNC and TCW will manage the strategy’s investment activities, which range from origination to underwriting, and portfolio management.

“We are thrilled to partner with PNC to expand our direct lending capabilities and provide financing to a critical segment of U.S. companies, as well as offer a differentiated investment solution for clients,” said TCW President and CEO Katie Koch. “PNC and TCW have a long history of developing creative solutions across a number of joint financings, and this partnership represents an exciting opportunity to capture significant market share of the expanding private credit market by leveraging the strengths of both our firms.”

During their first year, PNC and TCW aim to have $2.5 billion in investor equity capital available to invest. Supporting this fund are investments from PNC and Nippon Life, one of TCW’s strategic partners and shareholders.

Since interest rates have risen and credit has become more expensive, small businesses have become particularly vulnerable to the credit crunch. This vulnerability stems from traditional banks tightening their lending standards to mitigate risk and reduce losses. Delivering a new private credit solution should help address this gap in financing options for small businesses, providing them with much-needed access to capital to support their growth and operations.

Photo by fauxels

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