Adams Street Partners’ Lead Lender Status Enhances Due Diligence and Repeat Deal Success

Adams Street Partners, a global private markets investment manager, is leveraging its lead lender status to gain a competitive edge in the private credit market. According to partner and head of private credit Bill Sacher, being a lead lender allows the firm to undertake thorough due diligence on underlying investments, negotiate loan terms directly, and ultimately win repeat deals.

Sacher highlighted the advantages of being a lead lender, including better access to information, influence over capital structure design, and the ability to negotiate loan documentation. These benefits enable Adams Street to drive superior risk-adjusted returns, mitigate losses, and make well-informed underwriting judgments. Sacher emphasized that this private equity style due diligence sets lead lenders apart from non-lead lenders in the market.

Despite the benefits of being a lead lender, Sacher noted that Adams Street does not exclusively engage in transactions where it holds this status. The firm prioritizes being a lead lender in the majority of its deals but evaluates each opportunity on a case-by-case basis. Sacher emphasized that the firm’s standards for due diligence and documentation must be met, regardless of its role in the transaction.

When asked how private credit firms can become lead lenders, Sacher emphasized the importance of experience, relationship building, and credibility as a lender. He explained that sponsors look for lenders who can provide certainty of financing and act as solution providers. To succeed as a lead lender, firms must have a deep understanding of financing processes, loan documentation, and the ability to communicate effectively with multiple lenders.

Adams Street currently manages $9.7 billion in private credit assets as part of its $58 billion global portfolio. The firm’s recent success includes raising $1 billion for its first collateralized loan obligation (CLO) and expanding into real estate finance. With its lead lender status and expertise in private credit, Adams Street is well-positioned to continue driving superior returns for its investors in the competitive market landscape.