Willow Tree Credit Partners Closes Private Credit Continuation Vehicle Led by HarbourVest Partners

Willow Tree Credit Partners LP has successfully closed Willow Tree Fund II-CV, LP, a private credit continuation vehicle with an aggregate transaction value of approximately $730 million. The transaction, which took place on August 6, 2026, was led by HarbourVest Partners, a prominent player in the private markets sector, and included participation from a syndicate of institutional investors alongside Willow Tree itself. This continuation vehicle is designed to acquire a diversified portfolio of around 130 securities, primarily consisting of first-lien loans and sponsor-backed companies, from the earlier Willow Tree Fund II LP, which was launched in late 2020 and early 2021.

The establishment of the continuation vehicle allows existing limited partners to either realize liquidity or maintain their exposure to the underlying assets. This structure is increasingly being adopted in private markets as a means to provide flexibility and options for investors while enabling fund managers to continue overseeing high-quality portfolios. Tim Lower, Founder and CEO of Willow Tree, emphasized the importance of this transaction in reflecting the strength and consistency of the portfolio built during Fund II. The continuation vehicle serves as a strategic solution that benefits both existing investors and new capital partners, while also preserving the integrity of the assets involved.

Willow Tree Credit Partners, founded in 2017, has positioned itself as a significant player in the middle market private credit space. The firm focuses on providing senior secured, floating-rate loans to financial sponsor-backed and family-owned middle market businesses. With a robust origination strategy that leverages a network of operating advisors and financial sponsors, Willow Tree aims to deliver bespoke capital solutions tailored to businesses with EBITDA ranging from approximately $5 million to $75 million. The firm's expertise and market knowledge have been pivotal in building a strong portfolio, making it an attractive partner for institutional investors.

HarbourVest Partners, with over 44 years of experience and more than $160 billion in assets under management, has established itself as a leader in private markets. The firm's participation in this transaction underscores its capability in structuring credit secondaries solutions for general partners while gaining exposure to a diversified portfolio of senior loans. The collaboration between Willow Tree and HarbourVest highlights the growing trend of utilizing continuation vehicles as a strategic tool within the private equity landscape.

The successful closing of Willow Tree Fund II-CV, LP reflects broader market dynamics where private credit continues to gain traction among institutional investors seeking yield in a low-interest-rate environment. As the demand for flexible investment structures rises, continuation vehicles are likely to play an increasingly important role in providing liquidity options and facilitating ongoing investment strategies. This transaction not only underscores the strength of Willow Tree's platform but also signals a positive outlook for the private credit sector as it adapts to evolving investor needs.