Direct Lending Strategy

First Eagle Direct Lending strategy seeks to provide flexible financing solutions to the US middle market through privately originated and privately negotiated senior secured loans. Our investment strategy relies on a proactive, comprehensive approach to transaction deal sourcing, a robust due diligence process, underwriting expertise supported by strong industry knowledge, and ongoing active portfolio management.

Strategy at a glance

  1. The above are not investment guidelines or restrictions and are subject to change without notice.

  2. The information provided is not to be construed as a recommendation or an offer to buy or sell or the solicitation of an offer to buy or sell any fund or security.

Investment Approach

Our Direct Lending team seeks to invest in private equity sponsored middle market companies primarily through directly originated senior secured first lien loans, including asset-based loans, opportunistic senior debt, unitranche and second lien debt. We invest primarily in companies that are located in North America and focus on companies with an EBITDA between $5-50 million. FEAC employs a rigorous and disciplined underwriting and due diligence process that includes a comprehensive understanding of a portfolio company’s industry, market, operational, financial, organizational and legal position and prospects.

Strategy at a glance

  1. The above are not investment guidelines or restrictions and are subject to change without notice.

  2. The information provided is not to be construed as a recommendation or an offer to buy or sell or the solicitation of an offer to buy or sell any fund or security.

Competitive Advantages

  • An experienced management team

    Dedicated and experienced investment professionals led by our senior management team that average more than 20 years of private capital investment experience. Each individual brings a distinct investment perspective and skill set having invested through multiple business and credit cycles across the entire capital structure.

  • A proactive sourcing platform

    Our originators have a deep and diverse relationship network in the debt capital and private equity markets helping drive a robust deal pipeline. Located across five regional offices, we are able to build trusted, long-standing relationships on a local level.

  • Expertise and brand recognition among PE sponsors

    We have the institutional knowledge and operational infrastructure required to be a trusted debt provider in the middle market. Our comprehensive underwriting methodology and monitoring processes have been developed from 14 years of investing in direct lending credit strategies.

Permanent Direct Lending Investment Committee Members:

  • Jonathan Dorfman Headshot

    Jon Dorfman

    Managing Principal and Chief Investment Officer, Napier Park Global Capital
    Industry start:  
    1984
    Year joined:  
    2007

  • Michelle Handy

    Senior Managing Director and Chief Investment Officer of Direct Lending, Napier Park Global Capital
    Industry start:  
    1997
    Year joined:  
    2016
  • Headshot of Melanie Hanlon, Senior Managing Director and head of US Credit Research, Napier Park Global Capital

    Melanie Hanlon

    Head of US Credit Research
    Industry start:  
    1993
    Year joined:  
    1997

Rotating Direct Lending Investment Committee Members:

Process

First Eagle Alternative Credit has significant institutional expertise and brand recognition among private equity sponsors gained from 14 years of investing in direct lending credit strategies. Our investment strategy relies on a proactive, comprehensive approach to transaction deal sourcing, a robust due diligence process, underwriting expertise supported by strong industry knowledge, and ongoing active portfolio management.

  • 01

    Direct Origination and Deal Sourcing

    Our originators have a deep and diverse relationship network in the debt capital and private equity markets helping drive a robust deal pipeline.

  • 02

    Investment Due Diligence

    We employ a rigorous and disciplined underwriting and due diligence process that includes a comprehensive understanding of a portfolio company’s industry, market, operational, financial, organizational and legal position and prospects.

  • 03

    Industry Expertise

    Our Direct Lending investment team is organized by industry verticals. This enables us to leverage deep, long-standing deal sourcing relationships, identify risks early in our credit underwriting, provide value to sponsors in their diligence and execute transactions with a high level of conviction.

    Industry verticals include:

    • Business and Financial Service
    • Consumer
    • Healthcare
    • Information Technology
    • ABL
       

  • 04

    Active Portfolio Management

    We believe that many middle market companies are inclined to seek value-added investors aimed at developing a constructive partnership to help them navigate economic cycles and operational issues as they arise.

  1. Risk Disclosures

  2. Alternative Credit Risks

  3. Alternative investments can be speculative and are not suitable for all investors. Investing in alternative investments is only intended for experienced and sophisticated investors who are willing and able to bear the high economic risks associated with such an investment. Investors should carefully review and consider potential risks before investing. Certain of these risks include:

    • Loss of all or a substantial portion of the investment;
    • Lack of liquidity in that there may be no secondary market or interest in the strategy and none is expected to develop;
    • Volatility of returns;
    • Interest rate risk;
    • Restrictions on transferring interests in a private investment strategy;
    • Potential lack of diversification and resulting higher risk due to concentration within one of more sectors, industries, countries or regions;
    • Absence of information regarding valuations and pricing;
    • Complex tax structures and delays in tax reporting;
    • Less regulation and higher fees than mutual funds;
    • Use of leverage which magnifies the potential for gain or loss on amounts invested and is generally considered a speculative investment technique and increases the risks associated with investing in the strategy;
    • Carried interest which may cause the strategy to make more speculative, higher risk investments that would be the case in absence of such arrangements; and
    • Below investment-grade loans which may default and adversely affect returns.

  4. Disclosures

  5. These are not investment guidelines or restrictions and will be subject to change. Actual portfolio will differ.

  6. FEF Distributors, LLC (“FEFD”) (SIPC), a limited purpose broker-dealer, distributes certain First Eagle products. FEFD does not provide services to any investor, but rather provides services to its First Eagle affiliates. As such, when FEFD presents a fund, strategy, or other product to a prospective investor, FEFD and its representatives do not determine whether an investment in the fund, strategy or other product is in the best interests of, or is otherwise beneficial or suitable for, the investor. No statement by FEFD should be construed as a recommendation. Investors should exercise their own judgment and/or consult with a financial professional to determine whether it is advisable for the investor to invest in any First Eagle fund, strategy, or product.

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