Direct Lending Fund Suspends Withdrawals After Big Loan Goes Bad
- Defaulted debt accounts for about one-quarter of firm’s assets
- CEO Ross says he suspects misconduct but not sure by whom
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Direct Lending Investments, which had $758 million in assets in November, said it suspended withdrawals and redemptions from its funds after a borrower defaulted on a loan that accounts for about a quarter of its capital.
The borrower, a company that buys accounts receivables from telecommunication companies, owes $191.3 million, Direct Lending said in a Feb. 11 letter to investors seen by Bloomberg. The borrower is owed $160 million from other firms, but "a substantial portion" of that might not be recoverable, the letter said.