Jefferies Credit Partners closed its new private credit secondaries vehicle at €1 billion in commitments, reaching target without extension. The fund will split deployment between distressed loan acquisitions in the secondary market and selective new origination where pricing reflects elevated risk. The raise finished inside six months.
The timing reflects continued demand for secondaries exposure as mark-to-market pressure forces portfolio sales across European private credit. Sellers include family offices reducing leverage exposure, regional banks trimming non-core holdings, and smaller credit managers facing redemption queues. Jefferies positions the vehicle to acquire loans at discounts between 12% and 28% to par, depending on sector and documentation quality. The firm declined to specify split between secondary purchases and primary lending but confirmed both strategies will run concurrently.
The close matters because it confirms institutional appetite for credit secondaries despite public market volatility. Pension allocators and insurance capital contributed roughly 60% of commitments, with the balance from family offices and wealth platforms. This mix signals that long-duration allocators see value in acquiring seasoned loans at wider spreads than available in primary syndication. The fund also benefits from Jefferies' balance sheet co-investment, which the firm sized at 8% of total commitments, aligning economics without crowding LPs.
Secondaries pricing in European private credit widened through Q4 2024 as refinancing risk surfaced in lower mid-market borrowers. Loans to companies with €15 million to €75 million in EBITDA traded at steeper discounts than larger credits, creating inventory for funds like this one. Jefferies will staff the vehicle with six investment professionals based in London and Frankfurt, using the firm's direct lending desk for origination flow. The structure avoids overlap with Jefferies' flagship direct lending fund, which closed at $2.3 billion in Q2 2024 and focuses on senior secured sponsor-backed deals.
Operators should track secondary loan pricing across European mid-market credits through Q2 2025, particularly in sectors with refinancing walls between now and year-end 2026. Jefferies will begin deploying capital in January, with first-close velocity indicating the fund could reach 40% to 50% deployment by mid-year if deal flow holds. Distressed loan volumes in Europe rose 34% year-over-year in 2024, and that trend shows no sign of reversing as interest rates remain elevated and sponsor exits slow.
The fund structure includes a 7-year term with two one-year extensions, standard for secondaries vehicles that need time to work through loan maturities and restructurings. Management fees sit at 1.5% on committed capital during the investment period, then step down to 1.25% on invested capital. Carry sits at 15% with an 8% preferred return. The terms are tight for a secondaries fund, reflecting the brand and the deal access Jefferies brings through its broader credit platform.