Direct lending firm hits $3 billion as investors pile in

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Amid still tight lending from traditional sources, direct lending is hot and Steve Czech is taking full advantage.

The hedge fund firm he runs, Czech Asset Management, has just closed its second fund to new capital after raising $1.5 billion, according to a person familiar with the situation.

Czech had originally sought $1 billion for the SJC Direct Lending Fund II but that was increased due to high demand. Investors—including public pensions in Michigan and South Carolina—asked to commit about $1.8 billion but were limited to the $1.5 billion maximum.

Direct- or asset-based lending funds attract multi-year capital commitments to make loans to mid-sized companies that are increasingly overlooked by banks because of stricter lending standards.