In a move to tap into the burgeoning $1.5 trillion private-debt market, Wells Fargo (NYSE: WFC ) & Co. and Centerbridge Partners have launched Overland Advisors, a direct-lending fund with a capital of $5 billion. This initiative, announced on Tuesday, closely aligns with strategies adopted by major global financial institutions such as Societe Generale (OTC: SCGLY ) SA, Brookfield Asset Management Ltd., Deutsche Bank AG (NYSE: DB ), JPMorgan Chase & Co. (NYSE: JPM ), and Barclays (LON: BARC ) Plc.
The newly formed fund has already secured nearly $2 billion in initial equity commitments from two prominent investors - the Abu Dhabi Investment Authority and the British Columbia Investment Management Corp. The substantial backing from these entities underscores the growing interest and confidence in alternative capital structures that are growth-oriented.
Charlie Scharf, CEO of Wells Fargo, and Jeff Aronson, co-founder of Centerbridge Partners, both view this venture as an innovative approach to offering clients alternative capital structures focused on growth. They believe that Overland Advisors will provide a unique platform for investors seeking exposure to the thriving private-debt market.
This development comes at a time when private debt has become an increasingly attractive asset class for investors worldwide. The launch of Overland Advisors is expected to further stimulate this trend, providing more avenues for investments in the private debt sector.
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