MINNEAPOLIS, Oct. 18, 2025 — Castlelake has successfully closed its latest fund, Castlelake Asset-Based Private Credit III, securing $2.3 billion in commitments—well above its $2 billion target. The fund drew a wide range of institutional investors, including pension funds, sovereign wealth funds, and endowments. Notable participants include the Teachers' Retirement System of Louisiana and the Virginia Retirement System.

The final close, which took place in August 2025 after a year-long fundraising effort, highlights the firm’s credibility in private credit markets. The fund takes a conservative approach, with no leverage at the fund level, reflecting Castlelake’s cautious yet strategic investment philosophy.

This successful raise also underscores a broader trend: investors are increasingly drawn to asset-backed lending as a stable, resilient alternative to other forms of private credit. In a market marked by volatility, the disciplined deployment of capital into tangible, asset-secured loans is viewed as a safer bet with attractive returns.

Strategic Deployment Across Sectors

The new fund continues the strategy of its 2022 predecessor, focusing on asset-based lending across a variety of sectors.

Consumer and Small-Business Finance: The fund will provide loans to individuals and small enterprises, enabling growth and supporting economic activity at the ground level.

Residential and Commercial Mortgages: Capital will also flow into homebuyers and commercial property ventures, reflecting ongoing demand in both markets.

Aviation Credit: While Castlelake is renowned for its aviation financing, this sector will represent a smaller portion of the portfolio, ensuring diversification and mitigating risk.

Approximately 60% of the fund’s capital will be directed to the U.S., with the remaining 40% allocated to Western Europe. The focus on consumer and small-business finance, combined with selective mortgage and aviation investments, represents a balanced strategy aimed at stable returns and long-term growth.

How is Capital Being Deployed

From the outset, Castlelake has moved quickly to put the fund to work. About one-third of committed capital has already been deployed in early investments that reflect the fund’s priorities.

Residential Mortgage Partnerships: The fund entered a $2 billion partnership with Invictus Capital Partners, targeting residential mortgage investments.

Credit Facilities for Specialized Lenders: Castlelake has extended financing solutions to Equifinance and TradeBridge, enabling these firms to expand their lending operations.

These early moves not only demonstrate Castlelake’s proactive approach but also signal confidence that asset-backed lending continues to offer compelling opportunities. By acting quickly, the firm positions itself to capture returns ahead of competitors and reinforce its market presence.

Why Investors are Backing Asset-Based Lending

The broader context for this fundraising success is a competitive landscape for private credit. Firms such as Neuberger Berman and KKR have also raised sizable funds targeting similar strategies. Yet investor appetite for asset-based lending remains robust.

Institutional Confidence: Investors are drawn to the relative security of loans backed by tangible assets, which reduces exposure to market swings and economic shocks.

Diversification and Resilience: Asset-backed lending allows portfolios to balance higher-risk investments with secured positions, offering a reliable yield profile.

With over $27 billion in assets under management, Castlelake leverages its experience and relationships to navigate this landscape effectively. The firm’s disciplined strategy—allocating capital to carefully vetted sectors and taking a hands-on approach to management—continues to resonate with institutional investors seeking both stability and opportunity.

Castlelake’s new fund positions the firm to respond to emerging lending opportunities across the U.S. and Europe, expand its asset-backed finance platform, and deliver measurable results for its investors. In an environment where certainty is prized, Castlelake’s combination of expertise, speed, and disciplined strategy sets it apart.