Aylward’s Sona Raises $800 Million for Capital Solutions

(Bloomberg) -- Credit manager Sona Asset Management raised $800 million in a bid to provide custom financing to businesses struggling to access cash, as John Aylward’s hedge fund firm capitalizes on a retreat by conventional banks.

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The money mobilized for the London-based firm’s second capital solutions fund exceeded its $500 million target and will be deployed across European credit markets, according to a memo seen by Bloomberg News. It drew existing and new investors, including sovereign wealth funds, insurance companies, endowments and pension funds.

Sona is among a raft of asset managers that have raced to take advantage of a slowdown in lending after a surge in interest rates and increase in distress prompted banks to avoid risk and pull back. In 2022, Arcmont Asset Management announced raising about €800 million for its capital solutions fund.

“Given the ever-changing landscape of credit markets, opportunities emerge where the traditional set-up falls short,” Sona’s founder and Chief Investment Officer Aylward wrote in the memo.

The company raised $300 million for its first private-credit capital solutions fund in 2020, with its second becoming its first commingled pool in its capital solutions strategy. The latter has invested in senior debt in performing companies across both public and private markets.

Sona has recruited an additional three senior managers to build out the investments, on top of several hires across the business this year. In 2023, the firm brought Stephen Smith, Barclays Plc’s co-head of global leveraged finance syndicate, in a new role as head of capital markets.

Firms such as Diameter Capital Partners, DWS Group, Pacific Investment Management Co., PGIM and T Rowe Price are among those that have bought or are building private credit businesses, seeking to benefit from higher fees they can charge.

Founded in 2016 by former Deutsche Bank trader Aylward, Sona started with about $300 million, managing exclusively for Paloma Partners before opening it up to external investors. It now oversees a total of about $8 billion, according to the memo, and its website says it has 72 employees.

(Updates with another money manager’s fundraising in third paragraph.)

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