Capital infusion underscores commitment to platform, which scoops up the type of loan that private market fund managers use to help pay for deals
The Canada Pension Plan Investment Board has committed $300 million to back a new Varde Partners platform that will purchase subscription credit lines from major global banks, underscoring the pension fund’s expanding reach into alternative fund finance.
Subscription facilities are short-term lending arrangements that private equity and other closed-end fund managers use to close deals quickly without immediately calling capital from their investors. Under the agreement announced Tuesday, which was reported by Bloomberg, Varde will acquire these lines on an ongoing basis from an undisclosed large bank, offering its partner relief from stringent regulatory capital requirements.
“Banks have traditionally held these credit lines on their balance sheets and used tools like synthetic risk transfers to optimize capital charges,” said Missy Dolski, Varde’s global head of capital markets. “Now we’re stepping in to buy them outright or share the exposure,” she added, noting that the move allows private investors to tap a lucrative slice of fund-finance activity.
The trend has accelerated as regulators around the world press lenders to reduce risk-weighted assets. By offloading subscription lines, banks can free up capital, while firms like Varde benefit from the attractive yields these instruments can generate. For fund managers, the arrangement delivers crucial agility—deploying cash at speed and postponing investor drawdowns in ways that can enhance overall returns.
Varde, which oversees roughly $17 billion across real estate, asset-based finance and corporate credit, said the subscription-line platform represents a springboard for further expansion into fund-finance lending. With CPP’s infusion of equity capital, the firm aims to solidify its position as a leading buyer of private-fund debt and offer banks a reliable outlet for their portfolios.
