Fidelity International has abandoned its direct lending strategy in Europe, less than a year after announcing the launch of its European Direct Lending Fund, according to market sources.
The company has disbanded the team it hired to build the strategy, sources said.
“Following a strategic review, Fidelity has decided not to proceed with manufacturing proprietary European direct lending and infrastructure investment capabilities,” Fidelity said in a statement to LCD. “The company, however, will partner with third parties to enable them to serve its current and future client needs.”
“Unfortunately, some roles will be impacted by this decision,” the statement added.
The company said that Andrew McCaffery, co-CIO for fixed income, multi-asset and private assets, will step down. “Fidelity remains committed to providing access to a wide range of private assets capabilities to its clients, with plans to capitalize on the success of its real estate and collateralised loan obligation (CLO) businesses,” the company said.
Fidelity has become the first manager to backtrack its foray into direct lending, after the market witnessed what many called a ‘golden era’ for private credit. Deutsche Bank, Rabobank, Societe Generale and SMBC have all launched direct lending strategies in order to capitalize on the boom in the private credit market, among others.
Fidelity International last October announced its move into direct lending with a loan to Dutch dental services company Clinias Dental Group. The new Luxembourg-domiciled fund was launched with a focus on senior secured loans to middle market companies with EBITDA of roughly €5 million to €30 million.
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