Jefferies Credit Partners is raising approximately €1 billion for a new secondaries fund focused on acquiring private credit loans and writing select new commitments. The vehicle marks the investment bank's first dedicated secondaries strategy in a private credit market now approaching $1.7 trillion in assets under management.
The fund will purchase existing loan positions from other private credit vehicles and selectively underwrite fresh debt alongside those acquisitions. Jefferies declined to specify target IRR or the proportion of capital earmarked for secondaries versus primary commitments. The firm began marketing to European and North American allocators in late March and expects a first close by September.
This matters because secondaries infrastructure in private credit remains thin relative to private equity, where secondary volume hit $132 billion in 2024 according to Jeffries' own research. Private credit funds raised during 2020-2022 are now entering liquidity windows while facing portfolio company refinancing pressure and slower M&A exits. Limited partners who overallocated to illiquid credit strategies now need release valves. Jefferies is building the plumbing before the pressure spike. The bank's existing direct lending platform holds roughly $18 billion in committed capital across three vintage funds, giving it deal flow visibility and pricing data that pure secondary buyers lack.
The timing intersects with two structural shifts. First, regional banks continue retreating from leveraged lending, leaving $47 billion in syndicated loan commitments unallocated in Q1 2025 per LCD data. Second, the Basel III endgame rules finalized in January impose higher capital charges on bank lending to non-investment-grade borrowers, pushing more flow toward non-bank lenders. Jefferies is positioning to buy loans at discounts from sellers facing redemptions while simultaneously stepping into deals vacated by regulated lenders. The dual mandate—secondaries and primaries in one vehicle—lets the fund monetize information asymmetry between distressed sellers and borrowers still performing.
Allocators should watch three developments over the next six months. First, whether Jefferies prices the fund at a discount to NAV on secondaries purchases or underwrites at par, which signals their view on near-term credit stress. Second, the mix of European versus U.S. loan exposure, given that European private credit secondaries traded at 12-18% discounts to NAV in Q4 2024 compared to 6-9% in the U.S. per Lazard data. Third, any portfolio company defaults in Jefferies' existing direct lending funds, which would cloud the fundraise and test the bank's underwriting discipline entering a late-cycle environment.
The €1 billion target sits below the €2-3 billion raised by dedicated secondaries specialists like Pemberton or HarbourVest for similar strategies, but Jefferies is leveraging its investment banking relationships for proprietary deal flow rather than competing in broadly syndicated auctions. The first close deadline is sixteen weeks out.