DEF 14C: PGIM Private Credit Fund Adds Deerpath Capital Management as Sub-Subadviser

PGIM Private Credit Fund has appointed Deerpath Capital Management as a sub-subadviser to manage a portion of the fund's direct lending assets, effective after a 20-day information period.

Summary

• PGIM Private Credit Fund has approved a sub-subadvisory agreement with Deerpath Capital Management, LP.
• Deerpath will serve as a subadviser alongside PGIM Private Capital and PGIM Fixed Income, all under the supervision of PGIM Investments LLC, the fund's manager.
• The Board of Trustees approved the agreement on March 27, 2025, and it was ratified by a majority of shareholders on April 1, 2025.
• The agreement allows Deerpath to manage a portion of the fund's direct lending assets, making investment decisions in line with the fund's objectives and policies.
• PGIM will compensate Deerpath from its subadvisory fees, with no direct fees paid by the fund to Deerpath.
• The initial term of the Sub-Subadvisory Agreement is two years, subject to annual renewals.
• As of December 31, 2024, Deerpath has over $8.0 billion in assets under management.

Sentiment

Score: 7

Explanation: The document is neutral to positive. It describes a planned change in the fund's management structure with approvals already secured. The addition of Deerpath is presented as a positive development, but there are no explicit forward-looking statements that would significantly boost sentiment.

Positives

• The addition of Deerpath Capital Management aims to enhance the fund's investment capabilities in direct lending.
• The Board of Trustees and shareholders have approved the Sub-Subadvisory Agreement, indicating confidence in the arrangement.
• Deerpath's expertise in lower middle-market lending could provide diversification and potentially attractive returns for the fund.
• Deerpath has over $8.0 billion in assets under management as of December 31, 2024, indicating a strong track record.

Risks

• The document does not explicitly mention any risks associated with the new sub-subadvisory agreement.
• However, any change in investment management carries inherent risks, including potential underperformance or misalignment of investment strategies.
• The success of the arrangement depends on the effective collaboration and oversight by PGIM Investments LLC.

Future Outlook

The Sub-Subadvisory Agreement is for an initial two-year period and will continue if approved annually, suggesting a commitment to ongoing evaluation and potential long-term collaboration.

Industry Context

The appointment of a sub-subadviser reflects a trend in the investment management industry towards specialization and outsourcing of specific investment strategies to external experts.

Comparison to Industry Standards

• PGIM's AUM of $1.38 trillion as of December 31, 2024, positions it as a major player in the asset management industry, comparable to firms like BlackRock and Vanguard.
• Deerpath's focus on direct lending to lower middle-market companies aligns with the strategies of other private credit firms such as Ares Capital and Golub Capital.
• The fee structure, with a management fee and incentive fee, is standard practice in the alternative investment industry, similar to hedge funds and private equity funds.

Stakeholder Impact

• Shareholders may benefit from Deerpath's expertise in direct lending, potentially leading to improved investment performance.
• The change in subadvisory arrangements is not expected to have a significant impact on employees or other stakeholders.

Next Steps

• The Sub-Subadvisory Agreement will be executed no sooner than 20 calendar days after the Information Statement is sent to shareholders.
• Deerpath will begin managing a portion of the fund's direct lending assets.
• The Board will conduct annual reviews of the Sub-Subadvisory Agreement to assess its effectiveness and determine whether to renew it.

Key Dates

Keywords

sub-subadvisory agreement, Deerpath Capital Management, PGIM Private Credit Fund, investment management, direct lending, PGIM, subadviser, private credit, investment