Churchill Asset Management, the United States asset management company of Nuveen Private Capital, has announced the final close of Junior Capital Opportunities Fund III with 1.54 billion dollars in total commitments. It is the largest fund raised to date in the programme, exceeding its original 1 billion dollar target by more than 50 percent and more than doubling the 737 million dollars raised by its predecessor.
The fund invests in junior debt to private equity sponsor backed United States middle market companies. It drew support from pension funds, insurance companies, asset managers and family offices. About 665 million dollars of commitments were raised through rated feeder structures designed to provide insurance investors with capital efficient access to the strategy.
The fund has already deployed about 600 million dollars across 44 portfolio companies, alongside 30 private equity firms. Churchill says it has invested more than 10 billion dollars in over 290 junior capital transactions since 2011.
Junior capital sits between senior debt and equity in sponsor buyouts, and its fundraising is a direct read on leveraged buyout volume expectations. A record close at this point in the cycle, with insurers supplying more than two fifths of the money through rated feeders, shows both that sponsors expect to keep buying mid market companies and that the marginal buyer of the riskiest debt tranche is now an insurance balance sheet.