Pacific Current commits US$25.1 million to fuel IFP growth
Pacific Current Group (ASX: PAC) has entered into an agreement to provide a US$25.1 million Senior Secured Loan Facility to existing portfolio company IFP Group, LLC. The Pacific Current IFP Growth Facility serves a dual purpose: refinancing IFP’s existing debt whilst funding growth acquisitions across the advisor services sector.
The facility will be drawn progressively rather than in full at closing. It includes both a refinance component to retire existing indebtedness and a growth acquisition facility to support IFP’s acquisition of advisor books, transition packages, and other approved growth initiatives. This structure demonstrates Pacific Current’s active portfolio management approach, extending beyond passive equity stakes to provide tailored capital solutions that support portfolio company expansion.
For Pacific Current shareholders, the transaction creates an additional income stream at attractive rates whilst supporting the value growth of an existing portfolio investment. The senior secured structure provides downside protection through first-ranking security over all borrower assets, balancing income generation with capital preservation.
How senior secured lending works for asset managers
A senior secured loan facility means Pacific Current sits at the front of the queue for repayment if financial difficulties arise. The “first-ranking charge” over all IFP assets provides tangible security, reducing credit risk compared to unsecured lending.
The four-year bullet maturity structure means IFP will repay the principal in full at the end of the term, whilst paying interest throughout the facility period. This differs from amortising loans where principal is gradually repaid over time. For Pacific Current, the structure provides predictable interest income whilst maintaining capital deployment until maturity.
This transaction reflects a broader trend amongst alternative asset managers providing private credit solutions to portfolio companies, creating diversified return streams that complement traditional equity holdings.
Facility structure and key terms
The commercial terms of the Pacific Current IFP Growth Facility include:
- Four-year bullet maturity structure
- Base interest rate of 10% per annum
- Pricing linked to leverage metrics
- First-ranking security over all borrower assets
- Growth facility available for 36 months from closing
- Transaction-by-transaction drawdown requiring lender approval
- Strict use-of-proceeds controls
The progressive drawdown mechanism gives Pacific Current control over how and when capital is deployed. Each growth acquisition must receive lender approval before funds are released, ensuring capital is used for agreed purposes rather than discretionary spending.
What IFP will use the funding for
The facility comprises two distinct components addressing different strategic needs. The refinance facility will retire existing indebtedness, cleaning up IFP’s capital structure and potentially reducing overall borrowing costs. The growth acquisition facility targets revenue expansion through advisor book acquisitions, transition packages, and other growth initiatives over the next 36 months.
For investors, the refinancing component provides visibility into IFP’s strengthened financial position, whilst the growth facility supports revenue expansion that should enhance the value of Pacific Current’s existing equity stake.
Strategic rationale for Pacific Current
The transaction showcases Pacific Current’s multi-dimensional support capability for portfolio companies, extending capital beyond initial equity investments to facilitate strategic growth.
Michael Clarke, Managing Director
“The transaction demonstrates PAC’s ability to support the growth of portfolio companies whilst securing an attractive senior credit position that complements PAC’s existing equity investment.”
Pacific Current now earns both equity upside and credit income from its IFP relationship. The 10% per annum base interest rate provides immediate return on deployed capital, whilst the equity position captures value creation from IFP’s advisor acquisition strategy. This dual-income approach validates Pacific Current’s multi-boutique model, where capital support extends throughout the portfolio company lifecycle.
The first-ranking security position protects Pacific Current’s downside whilst the equity stake captures growth upside, creating an asymmetric risk-return profile favouring the lender.
Next steps and completion timeline
Completion of the Pacific Current IFP Growth Facility remains subject to customary conditions precedent, confirmatory due diligence, and final documentation. Financial close is expected to occur shortly, with progressive drawdown following rather than full deployment at closing.
The staged deployment approach allows Pacific Current to monitor IFP’s execution of its growth strategy whilst maintaining capital flexibility for other opportunities across its portfolio of eight boutique firms globally.
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