PennantPark and Hamilton Lane Form Joint Venture to Invest in Middle Market Loans

PennantPark Floating Rate Capital Ltd. has formed a joint venture with Hamilton Lane, called PennantPark Senior Secured Loan Fund II, to invest in middle market loans. The joint venture will invest $200 million, with PennantPark providing $150 million and Hamilton Lane providing $50 million. The joint venture aims to add a financing facility of $300 million, expanding its portfolio to $500 million.

PennantPark Floating Rate Capital Ltd. (NYSE: PFLT) and Hamilton Lane have formed a joint venture, PennantPark Senior Secured Loan Fund II, to invest in middle market loans. The venture will invest $200 million, with PennantPark contributing $150 million and Hamilton Lane providing $50 million. The joint venture aims to add a financing facility of $300 million, expanding its portfolio to $500 million. This strategic move is part of PennantPark's broader strategy to grow its investment portfolio and net investment income (NII).

The joint venture, which will be managed by PennantPark, will focus on senior secured loans in the middle market. This segment offers attractive yield opportunities and aligns with PennantPark's core investment strategy. The partnership with Hamilton Lane, a long-term and trusted partner, is expected to drive growth in PennantPark's NII and enhance its investment capabilities.

PennantPark's investment portfolio has shown significant growth, reaching $2.4 billion as of June 30, 2025, up from $1.98 billion at fiscal year-end 2024. The portfolio consists primarily of first lien secured debt with a weighted average yield of 10.4%. The company's strong portfolio quality is evident, with only 1.0% of investments on non-accrual (cost basis).

During Q3 2025, PennantPark invested $208.1 million in new and existing portfolio companies, while receiving $145.8 million in repayments. The company's Q3 NII of $0.25 per share fell short of its $0.31 quarterly distribution, but the Core NII of $0.27 per share, excluding one-time costs, was a positive indicator. PennantPark's NAV per share declined 1.0% quarter-over-quarter, reflecting some portfolio depreciation.

The new joint venture is expected to complement PennantPark's existing investment activities and further strengthen its position in the middle market. Management anticipates continued net investment income growth and full dividend coverage as it invests the capital raised through its ATM program and debt financings in the previous quarters.

References:
[1] https://www.stocktitan.net/news/PFLT/pennant-park-floating-rate-capital-ltd-announces-financial-results-10nly8nvwi3f.html