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Stifel (SF) Joins Lord Abbett to Form SBLA Private Credit

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Stifel Financial Corp. (SF - Free Report) and Lord Abbett, LLC have entered into a joint agreement to establish a leveraged lending joint venture — SBLA Private Credit. This new entity will concentrate on origination and management of existing loans to small and mid-sized portfolio companies of financial sponsors, thus, augmenting the existing capabilities of both firms.

Lord Abbett, founded in 1929, is an independent, privately held asset manager and is one of the oldest money management firms in the United States, managing a diverse range of assets, including U.S. mutual funds, and institutional and separately managed accounts for clients globally. It has been managing leveraged credit since 1971.

SBLA Private Credit integrates two of the industry’s most established brands, offering extensive middle-market coverage and renowned for their strategic growth and disciplined risk management. Through the combination of Stifel’s robust full-service platform and established direct lending proficiency with Lord Abbett’s solid leveraged credit presence and substantial capital base, SBLA Private Credit remains uniquely poised for success in the existing origination market.
Ron Kruszewski, chairman and CEO of Stifel, said, “Stifel continues to forge strategic partnerships that allow the firm to meet the different needs of our diverse client base and offer a full suite of competitive private credit solutions. By partnering with Lord Abbett, we are able to expand Stifel Bank’s capacity to lead larger credit facilities, and better support the growth of our clients.”

Douglas Sieg, CEO & Managing Partner of Lord Abbett, said, “This strategic partnership will deepen our market presence, expand our origination, and increase our scale, while differentiating and diversifying our loan origination capability and private credit offerings.”

SBLA Private Credit will be jointly managed by senior representatives of Stifel Bank and Lord Abbett. SF and Lord Abbett have co-invested across multiple loans beforehand, demonstrating the strongly aligned credit cultures between both entities.
This move is in alignment with Stifel’s growth strategy to deepen its domestic presence in private credit and expansion of its business through acquisitions.

SF has been engaged in expansionary initiatives in order to boost its client base as well as enhance asset class offerings. Last month, the company entered into a prime brokerage referral partnership with Marex Group PLC (MRX - Free Report) , enabling both firms to use their broker-dealer affiliates to cater to their hedge fund and investment management clients in a better way.

Under the terms of the partnership, Stifel’s institutional sales and trading group will provide MRX’s trading and execution capabilities to its hedge fund’s institutional clients and investment managers.

Further, this March, the company announced its plan to acquire Finance 500, Inc. and CB Resource, Inc., market leaders in the underwriting and issuance of certificates of deposits (CD). The deal aims to enhance and deepen SF’s CD funding offerings with market-leading CD underwriting, tech-enabled risk management and strategic planning capabilities.

Shares of this Zacks Rank #2 (Buy) company have risen 19.3% in the past six months, outperforming the industry’s growth of 13.5%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Other Firms Taking Steps to Boost Private Credit

Earlier this month, Bloomberg reported that KKR & Co. Inc. (KKR - Free Report) is looking to enter the private credit market in Japan to offer an alternative to bank loans. This will strengthen its foothold in Japan.

Per the report, KKR intends to expand its offerings to institutional investors and high-net-worth individuals within the country. It is currently engaged in discussions with domestic securities companies to offer products for individual investors.
Similarly, last month, Raymond James (RJF - Free Report) announced its plan to enter into the lucrative private credit business. Through its Investment Banking (“IB”) division, the company formed a strategic collaboration with Eldridge Industries and Raymond James Bank. Spearheading this expansion is Omer Masud, a seasoned credit industry expert appointed as the head of sponsor finance origination.

The newly formed Raymond James Private Credit aims to offer private credit solutions to portfolio companies of private equity firms. Leveraging Raymond James' robust IB platform RJF Bank's lending prowess and Eldridge Industries' asset management expertise, the venture is poised to strengthen relationships with leading private equity firms, particularly in key sectors such as consumer, diversified industrials, healthcare and technology & services.

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