TPG Twin Brook and Coller Capital successfully conclude a $3 billion transaction in the private credit secondary market
TPG Twin Brook Capital Partners and Coller Capital Close $3 Billion Continuation Fund Deal
In a significant move for the private credit secondaries market, TPG Twin Brook Capital Partners and Coller Capital have closed a deal worth $3 billion for a continuation fund. The deal, which is thought to be the largest transaction of its kind to date, has received strong support, according to Trevor Clark, founder and managing partner of TPG Twin Brook.
The deal involved a continuation fund, a popular strategy in the private credit secondaries market that offers several key benefits. Continuation funds allow General Partners (GPs) to transfer assets from a fund reaching the end of its term into a new vehicle, providing additional runway to realize further value from high-performing assets instead of forcing a sale or exit.
This approach offers liquidity and flexibility for Limited Partners (LPs). LPs have the option to either cash out by selling their interests, roll their investment into the new continuation vehicle, or do a combination of both. This offers tailored liquidity or continued exposure based on their preferences.
Continuation funds also help in delaying exits when broader market conditions are unfavorable. By buying more time and injecting follow-on capital, continuation funds enable GPs to unlock growth potential in portfolio companies and consolidate stakes, strengthening alignment between GPs and LPs.
Secondary investors benefit from more visibility into asset performance and a shorter investment horizon compared to primary funds. The deal provides LPs and GPs means to actively reshape holdings, optimize allocations, and meet liquidity needs in a large, growing private markets ecosystem.
In the specific case of the $3 billion deal, this large-scale GP-led secondary transaction illustrates how continuation funds can mobilize significant capital to provide liquidity solutions to LPs while enabling GPs to continue managing high-quality private credit assets. The transaction reflects increasing institutional demand for credit secondaries.
Deutsche Bank provided financing for the transaction, while legal counsel for Coller Capital was provided by Debevoise & Plimpton. Ropes & Gray acted for TPG Twin Brook in the transaction. Campbell Lutyens served as financial adviser on the deal.
Jonathan Leu, a principal at Coller Capital, appreciated the opportunity to work closely with TPG Twin Brook on the deal. The transaction's success is seen as a testament to the growing interest in private credit secondaries.
TPG Twin Brook's vehicle consists of floating-rate, senior secured, sponsor-backed loans from its 2016 and 2018 vintage funds. The continuation fund also offers new investors access to a diversified and high-quality pool of private credit assets. The aim of TPG Twin Brook's continuation fund is to provide existing investors with an attractive liquidity option.
The deal was designed to deliver on multiple priorities, including liquidity, alignment, and long-term capital. The broader private credit market is continuing to mature and expand, contributing to the growth in transaction volume in the private credit secondaries market.
The success of this deal underscores the validity of the flexible, solutions-based approach, according to Trevor Clark. The deal between mid-market direct lender TPG Twin Brook Capital Partners and secondaries manager Coller Capital is a significant step forward for the private credit secondaries market.
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