The UCI aims to deliver income, long-term capital appreciation and global diversification by investing in senior secured loans to middle market companies in North America, Europe and Australia. While sector agnostic, it focuses on stable, less cyclical industries and generally avoids those that are highly levered, volatile or heavily regulated, the firm said in a statement.

The UCI is domiciled in Luxembourg and has initially been passported for marketing in Austria, Belgium, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Norway, Sweden and Switzerland, and is available for private placement to qualified investors in other jurisdictions, including the United Kingdom, Hong Kong and Singapore.

The investment team focuses on seeking value in middle market lending by targeting companies with EBITDA of $10 to $75 million. This segment of the market typically has spreads that are higher and covenant protections that are stronger than other areas of direct lending and can deliver attractive risk-adjusted returns.

With a significant portion of the portfolio allocated to non-sponsored loans from privately held companies, the UCI can provide wealth investors access to a broader, more diverse segment of the market and a portfolio that is complementary to those that focus solely on private equity-sponsored loans. In the US alone, more than 90 per cent of the addressable market remains non-sponsored. Europe also presents a growing opportunity for direct lending loans as the penetration rate in European markets remains behind the US and is structurally growing.

“This UCI offers an alternative and diversified return stream to help manage the risk and return profiles of portfolios. As more wealth investors turn to private credit, we believe that we can deliver the expertise, alignment and differentiation that they are looking for through drawing upon over two decades of experience managing direct lending strategies for institutional investors,” Matt Shafer, head of international wealth at PGIM, said.

PGIM specialises in private credit with over $100 billion in assets under management in the asset class and over two decades of institutional direct lending experience, which reflects a strong culture of conservative credit underwriting.