Phoenix Merchant and Texas Capital target $100M-plus firms in credit push

Phoenix Merchant Partners and Texas Capital Alternative Asset Management formed a strategic partnership to provide senior secured financing to midsize businesses, launching Spurstone Credit, a perpetual-life fund targeting companies with $100 million to $1 billion in annual revenue.

"As the market has evolved, non-sponsored credits remain significantly underserved by larger institutions, and our approach, deep experience and expertise allows us to fill that gap," said Art Mbanefo, founder and chief executive of Phoenix.

The Dallas-based evergreen vehicle will begin raising commitments in the third quarter and has already attracted interest from a group of anchor institutional investors, the firms said without disclosing names or a fundraising target. Phoenix, which managed about $2.06 billion at the end of last year according to a regulatory filing, will control the fund's investment committee through Ryestone Advisors, a newly formed registered investment adviser that is applying for registration with the Securities and Exchange Commission. Texas Capital Alternative Asset Management, a wholly owned subsidiary of Texas Capital Bancshares (NASDAQ: TCBI), will be a minority economic investor in the adviser.

The partnership addresses a structural liquidity gap for non-sponsored, family-owned and founder-led enterprises that require flexible, non-dilutive senior capital to fund organic growth, strategic acquisitions and balance sheet optimizations. This segment has drawn increasing attention from alternative asset managers as competition for sponsored deals intensifies, with private credit assets under management globally surpassing $1.7 trillion by the end of 2025, according to Preqin data.

Texas Capital's origination network

Texas Capital, the only full-service financial services firm headquartered in Texas, will source many of the future deals through its corporate and investment banking coverage network, while Phoenix will contribute its proprietary origination sources. The fund's investments will mirror Phoenix's previous areas of focus: financial services, industrials, technology and healthcare.

"Proprietary origination remains the single biggest differentiator in the private credit landscape," Mbanefo said. "Working with TCAAM unlocks access to high-quality, founder-owned businesses across Texas and other economic centers like California, New York and Illinois."

Daniel Hoverman, head of corporate and investment banking at Texas Capital and president of TCAAM, said the partnership allows the bank to offer proprietary private credit financing solutions to clients while maintaining a disciplined approach to asset structuring and capital preservation.

The vehicle is structured as a perpetual-life, non-traded closed-end credit fund, designed to meet continuous liquidity needs of a broad range of investors alongside the ongoing financing requirements of middle-market businesses. Spurstone will focus on the U.S. market, with many of Texas Capital's prior investments concentrated in Texas, California, New York and Illinois.

The partnership comes as regional banks and alternative asset managers increasingly collaborate to capture midmarket lending opportunities that larger institutions have ceded. Unlike sponsored transactions backed by private equity firms, non-sponsored credits require more intensive underwriting and relationship-based origination — capabilities that Phoenix and Texas Capital said differentiate their joint venture from competitors.

This article is for informational purposes only and does not constitute investment advice.