Societe Generale and Brookfield team up to create €10bn fund as private debt boom continues
French banking giant Societe Generale has teamed up with Canadian investment manager Brookfield to create a credit fund they hope will raise €10bn (£8.6bn).
The fund, which hopes to reach its €10bn target over the next four years, will launch with €2.5bn of seed funding.
Initial funding will be directed at renewable energy, transport and fund finance.
Both firms aim to “significantly increase” their footprint in financing the global economy by providing large commitments with different forms of capital.
Bruce Flatt, chief executive of Brookfield, commented: “We’re excited to bring our own capital and our institutional client capital to unlock a tremendous opportunity within the investment grade market to support critical industries that underpin the global economy.”
Slawomir Krupa, who became boss of Societe Generale in May, said the partnership provides an “entirely new answer” to the growing demand for private debt.
Private credit, also known as direct lending, is traditionally provided by non-bank lenders to medium-sized businesses who struggle to access the bond market. Partly as a result of tighter banking regulation, the private credit market has grown from around $250bn at the end of 2010 to more than $1.5trn in 2022.
Societie Generale’s expansion into private credit follows a number of similar moves from other finance firms. Recently FTSE-250 listed Man Group acquired a controlling stake in Varagon Capital Partners as it seeks to expand into the US private credit market.