(Bloomberg) -- Private-credit firm 5C Investment Partners, co-founded by two former Goldman Sachs Group Inc. partners, will begin investing after amassing $1.6 billion for senior direct-lending transactions.
The figure includes leverage and a co-investment program, with Liberty Mutual Investments joining Michael Dell’s family office, DFO Management, as an anchor partner, said Tom Connolly and Michael Koester, 5C’s founders and co-managing partners.
“The private-credit market that we are addressing is nearly $2 trillion in size and growing,” Connolly and Koester said in an emailed statement. “There is plenty of room for private-capital providers as well as banks.”
The firm plans to provide financing to companies with “durable competitive advantages” in the upper middle market, which 5C defines as having earnings before interest, taxes, depreciation and amortization of $50 million or more. Generally, its borrowers will be private equity-backed, though the firm plans to work with companies outside the sponsor universe, including those that are family-owned, 5C executives said.
By favoring recession-resistant industries, 5C expects to focus on transactions in software, business services and parts of the health-care and financial-services sectors, though the firm may gain conviction around opportunities elsewhere, Connolly and Koester said.
Initially, 5C expects to make investments of $50 million to $100 million and, as the firm grows, its average check size will increase, they added.
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