Willow Tree Closes $730M Private Credit Continuation Vehicle
Willow Tree Credit Partners has closed Willow Tree Fund II-CV and related vehicles, establishing a private credit continuation fund with approximately $730 million in aggregate transaction value.
HarbourVest Partners led the transaction, with participation from a syndicate of institutional investors and Willow Tree.
The continuation vehicle acquired a diversified portfolio of approximately 130 securities from Willow Tree Fund II and its parallel funds, which began investing in late 2020 and early 2021. The assets consist primarily of first-lien loans to sponsor-backed companies.
The structure allows Willow Tree to continue managing the portfolio while giving existing limited partners the choice of receiving liquidity or maintaining exposure by rolling their interests into the new vehicle.
“Continuation vehicles are becoming an increasingly important tool across private markets, and we believe this structure demonstrates how they can benefit existing investors, new capital partners and managers while preserving high-quality assets,” said Tim Lower, founder and CEO of Willow Tree.
The deal marks the latest milestone in a bustling year for credit secondaries. In February, Coller Capital closed a $1.3 billion continuation vehicle for Ares Management, followed by Audax Private Debt tapping Pantheon for a $1 billion vehicle in May.
New York-based Willow Tree focuses on sourcing and structuring customized capital solutions for companies with earnings before interest, taxes, depreciation and amortization ranging from approximately $5 million to $75 million.
Evercore served as financial adviser on the transaction. Morgan Lewis provided legal counsel to Willow Tree, while Kirkland & Ellis advised HarbourVest.
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