Wells Fargo and Centerbridge Partners are launching a $5 billion private credit fund.

The strategy will target non-sponsor-backed North American middle market companies.

Investors in the fund will include Wells Fargo, Centerbridge, Abu Dhabi Investment Authority (ADIA) ($850bn AUM) and British Columbia Investment Management Corporation (BCI) ($230bn AUM).

The vehicle is set up as a business development company. The management company will be called Overland Advisors. Oakland Advisors will be controlled by Centerbridge and Wells Fargo will be a minority investor.

Wells Fargo will use its North American middle-market customer base to help originate investments.

“Overland represents a new paradigm in direct lending, bringing a relationship approach to direct lending and offering a much-needed capital solution in the large but underpenetrated non-sponsor U.S. middle market,” said Jeff Aronson, Co-Founder and Managing Principal of Centerbridge Partners. “We believe Overland draws on the unique and complementary capabilities of both Centerbridge’s leading private credit underwriting capabilities and Wells Fargo’s nationwide sourcing and origination network to offer an attractive new proposition for borrowers in the private lending and direct credit space at a particularly compelling time.”

“As a leader in U.S. middle market and asset-based lending, we are continually focused on finding ways to best serve our clients, and Overland can offer them options for alternative capital structures that can be used to pursue a broader set of growth and value creation initiatives across a variety of market conditions,” said Charlie Scharf, CEO of Wells Fargo. “Working with Centerbridge under our sourcing relationship will help us elevate our support of middle market clients.”

Hamad Shahwan AlDhaheri, Executive Director of the Private Equities Department at ADIA, commented, “Overland represents a highly differentiated and scalable approach to direct lending in the U.S. middle market. We are excited about our anchor investment in this unique platform.”

Daniel Garant, Executive Vice President & Global Head, Public Markets, BCI, said, “Direct Lending provides an important alternative financing source for middle market businesses. We believe Overland takes that to the next level by broadening and diversifying the types of businesses served, and we are pleased to be making this meaningful long-term investment.”