TC Latin America Expands With Emerging-Market Credit Strategy

The investor has formed TC Credit Partners to lend money to midmarket businesses in developing markets.

TC Latin America Partners has launched a credit arm to provide capital to small and midsize businesses in emerging markets, starting with the investment of $250 million from a separately managed account.

The firm plans to raise a fund to support the new group, TC Credit Partners, next year. The credit arm will make loans of $25 million to $50 million to emerging-market companies that need capital to expand but aren’t big enough to tap bank financing or issue bonds, said Christopher Wilder, who will lead the new effort as the group’s chief investment officer. Mr. Wilder previously managed a similar strategy at Abraaj Group, a defunct emerging market-focused firm.

By launching a credit arm, New York-based TC Latin America, which typically makes real-estate investments in Latin American countries, seeks to capitalize on a historic shortage of financing for midmarket companies in developing countries, which the coronavirus pandemic has made worse, Mr. Wilder said.

TCCP will be led by Co-founder and Chief Investment Officer Christopher Wilder, an industry veteran with more than 25 years of experience managing credit investment strategies in emerging markets, and will be further supported by TC Latam’s Co-founders Gregorio Schneider and Daniel Grunberg. Mr. Wilder, Mr. Schneider and Mr. Grunberg have known each other for more than 15 years and have previously partnered together and executed several successful emerging markets private credit and special situations transactions.

“We’re looking at the types of companies the international banks exited a long time ago,” he said. “With Covid, the dislocation has increased. What we’ve seen is that the size of the opportunity has grown exponentially.”

TC Credit Partners could make senior as well as mezzanine and other subordinated loans, Mr. Wilder said. The strategy is “sector agnostic” and has as its “sweet spot” companies with $20million to $30 million in annual earnings before interest, taxes, depreciation and amortization, he said.

The new group will start investing in Latin America to take advantage of the parent firm’s presence in the region, including offices in Colombia, Peru and Mexico. It will then seek to expand to Africa, Eastern Europe and Asia, Mr. Wilder said. He added that his team is negotiating a few deals in sectors such as telecommunications, media and mining.

TC Credit Partners is starting off with the $250 million raised from an institutional investor operating on behalf of insurance companies, said Gregorio Schneider, a TC Latin America co-founder and partner and the firm’s chief investment officer. After that capital is invested, the firm will seek to raise a debut fund for the new strategy, he said.

“We will start with this and then in the first half of next year we will be focusing on the fund and we will size it according to the opportunity,” Mr. Schneider said.

Contacto Luis Garcia at luis.garcia@wsj.com