Antares Capital, a US-based private credit firm overseeing more than $60 billion in assets, is considering a potential acquisition in Europe as part of its growth strategy.
“We are constantly evaluating Europe,” Tim Lyne, the direct lender’s chief executive officer, told the Bloomberg Intelligence Credit Edge podcast. “At some point in order to scale, we’d probably need to do an acquisition.”
Last year, the CPP Investments and Northleaf Capital Partners-backed Antares was weighing an acquisition of Hayfin Capital Management to quickly expand its European footprint. Hayfin ended up doing a management buyout instead.
“I don’t want to wait for the perfect acquisition to come along,” said Lyne. “Maybe we go organically, and then constantly be evaluating potential acquisitions.”
Click here to listen to the full interview with Tim Lyne
As the North American private debt market becomes increasingly saturated, fund managers are looking to Europe for diversification of both investments and investors.
Consolidation has also been rife in Europe’s private debt market in recent years. Listed German private equity firm Deutsche Beteiligungs AG announced a deal to acquire ELF Capital Group in 2023, while BlackRock Inc. acquired Kreos Capital and earlier this year, Sienna IM bought an Italian-focused firm.
Competition for talent is also fierce, as illustrated by a recent defection from the private credit team at Barings LLC. In a situation that’s been called one of the largest corporate raids in years, more than 20 employees jumped ship to join a Nomura Holdings Inc.-backed startup in search of better incentives.
This year has brought difficulty for some firms growing direct lending operations in Europe. Both Fidelity International and Polen Capital Management have stopped efforts.
Antares is hoping to take advantage of existing relationships with North American sponsors that do a lot of business in Europe, though Lyne notes significant differences between the two regions. “It’s a more challenging market because it’s so country specific,” said the CEO, referring to Europe.
Asked which European countries Antares is prioritizing, Lyne said: “Someone once mentioned to me that you want to start with the beer-drinking countries and then move to the wine-drinking countries. And so that might be a way.”
Other than Europe, Antares sees opportunities to expand its secondary private credit business. Lyne also notes the potential to do more in real estate, infrastructure and asset-backed finance and is considering potentially hiring or acquiring for that.
“We would either acquire a firm or do a big lift out,” Lyne said. “We may just need to acquire the talent out of a firm, or out of a couple firms.”
Following a broadening of the investor base to high-net-worth individuals from institutional buyers, Antares expects private credit to continue to expand as an asset class. Direct lending could be an allocation for US employees via 401k retirement plans “in a few years,” according to Lyne.
“You’re beginning to see this democratization of the asset class,” said Lyne.
(Adds comment on expanding investor base at end. A previous version corrected a word in the CEO’s quote in the fourth paragraph under the chart.)
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