Time for Thoughtful Transactions

With continued macro-economic uncertainty driving low M&A volumes, the landscape for financing is inevitably experiencing a sharper focus on strategic transactions. In an environment less conducive for realizations, companies and owners are increasingly faced with the question: How can we create value? Thoughtful transactions offer opportunities for business owners to position their companies in a way that generates tangible returns, potentially offsetting the impact of higher borrowing costs. Whether considering an acquisition, entering a new market, resetting the capital structure with a new financing partner, or re-balancing an asset in a portfolio, these opportunities can enable firms to position themselves for long-term growth and value creation.

Prudential Private Capital continues to partner with business owners and fundamentally sound companies to structure and execute thoughtful financing solutions. Our ability to provide flexible capital solutions across the credit spectrum can help firms navigate the complexities of the prevailing market conditions while simultaneously creating value.

Patient capital offers flexibility in uncertain markets. We offer several strategic options including junior capital solutions that are interest-only with no amortization prior to maturity, as well as preferred and common equity investments. This element of ‘patience’ affords a company time to process a strategic transaction and navigate uncertain economic conditions, noting that in a high interest rate environment, the cash burden of flexible junior capital relative to senior debt is narrow. Furthermore, Prudential’s ability to provide revolver and senior term debt alongside junior capital for a seamless, “one-stop” solution helps deliver value for our counterparties, improving speed and certainty of execution.

It’s important for firms to optimize a company’s capital structure to support both short-term and long-term business plans. Thoughtfully balancing risk (added leverage) with reward (faster growth, accomplishing other business or ownership goals) can provide greater opportunity for firms to maximize return on investment, especially in times of uncertainty.

Representative Partners

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Our Approach

Prudential Private Capital is a private debt provider with $102.4 billion of investments across 15 global offices (as of 3.31.24). Our tailored funding capabilities include Senior Notes, where we invest across the entire credit quality spectrum, and Junior Capital including Subordinated Notes and Structured Equity. We are a buy-and-hold investor, with investments starting from $10 million to larger hold sizes in excess of $300 million.

We have a relationship-centric approach and partner with management teams by providing long-term patient capital to fulfil strategic objectives, diversify funding sources, fund growth capex or acquisitions, and facilitate shareholder transitions. Our teams are focused on regional markets and maintain direct relationships with a wide range of institutions, across privately-owned mid-market businesses, non-public and public institutions, and charitable entities. To learn more about our alternatives strategies visit our mezzanine and direct lending pages.