Brigade Capital, a hedge fund with a strong focus on credit investment, has secured $300m from private investment giant Blackstone to grow its private credit strategy and bolster its collateralised loan obligations (CLO) platform, according to a report by Reuters.
The report cites unnamed sources close to the deal as revealing that Blackstone’s Multi-Asset Investing unit will allocate $150m to support Brigade’s new private credit strategy, part of a broader move into the burgeoning $2tn private credit market, and an additional $150m to support the hedge fund’s established CLO business, which currently manages $11bn across 25 deals in the US and Europe.
Brigade has already raised approximately $500m for the new private credit initiative and will target opportunities in the lower middle market—companies generating between $10m and $50m in earnings before interest, taxes, depreciation, and amortisation (EBITDA).
The private credit investment aligns with Blackstone’s Strategic Alliance Fund IV, managed by David Ben-Ur, which has over $1bn in assets and has previously backed Astaris Capital Management in London. Brigade becomes the third manager to join the fund.
With about $28bn in total assets, Brigade is actively expanding its presence in private credit, having raised approximately $1.5bn to support its platform, including future funds. The lower middle market, where Brigade will focus, offers attractive lending opportunities with higher spreads and yields due to limited competition. Examples of companies in this market include Awayday, a vacation rental company, and Saatva, a mattress and bedding retailer.
Brigade’s foray into private credit gained momentum two years ago with the recruitment of Jenny Lee from JPMorgan Chase and Jim Wolf from Whitehorse Capital. Their industry expertise and connections are expected to drive new deals in the lower middle market—often a challenging segment to access.
Neither Blackstone nor Brigade representatives commented on the investment.
