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Capital Southwest hires Weinstein for middle market lending

Capital Southwest Corporation hired Josh Weinstein to source and underwrite for direct-lending and middle-market syndicated credits.

He joins as a principal on the investment team. He will be based in Dallas.

Weinstein previously worked at H.I.G. WhiteHorse, where he sourced and structured middle-market credits across industries for several credit platforms, including a publicly traded BDC. He also worked at Morgan Stanley and Citigroup.

Dallas-based Capital Southwest is a BDC that invests in controlling and minority stakes of private companies. Its shares trade on Nasdaq under the ticker symbol CSWC. – Abby Latour

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Hayfin Capital Management hires Moravek for U.K. origination

Private debt fund manager Hayfin Capital Management has hired Paul Moravek as a managing director in its U.K. origination team.

Moravek, who begins work at the firm next week, joins from VentureFounders, a U.K.-based equity crowdfunding platform which he co-founded in 2013.

Previously he worked in leveraged finance at Merrill Lynch for nine years, having joined in 2004 from J.P. Morgan.

Hayfin recently bid farewell to two managing directors: Paul Levy, who joined investment banking boutique GreensLedge, andRinaldo Olivari, who left to launch his own financial technology firm.

Jeff Sockwell, also a managing director and co-head of origination at the firm had earlier left the firm in May to the U.S. He continues to be an advisor to the firm.

The moves follow a recapitalisation at Hayfin whereby the firm sold the portfolio of owned assets to Australian sovereign wealth fund The Future Fund, one of its shareholders. Proceeds from the €705 million sale were used to fund a dividend to investors. In a statement at the time of the deal in May, Hayfin said it would continue to manage the assets on behalf of The Future Fund alongside other third-party funds and separate accounts. Hayfin reaffirmed its commitment to its role as a European direct lending platform and said it would look to expand it across Europe.

The firm’s management team increased their stake in the business following the recap, while the firm’s institutional backers – private equity group Towerbrook Capital Partners, The Public Sector Pension Investment Board, The Ontario Municipal Employees Retirement System (OMERS), and The Future Fund – reduced their shareholdings pro-rata. – Oliver Smiddy

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Fifth Street Finance sells healthcare direct lender to rival MidCap

Fifth Street Finance Corp. has sold Healthcare Finance Group (HFG) to MidCap Financial, a competitor to HFG in direct lending to the healthcare industry.

“We decided that it was important to refocus FSC on our core lending businesses, particularly middle market sponsor-backed lending as well as technology lending and aircraft leasing,” a Fifth Street Finance Corp. statement today said.

HFG provided asset-backed lending and term loan products to healthcare companies.

As of March 31, HFG was the largest holding of FSC’s portfolio, accounting for 4.3%. The HFG investment totaled $118 million at fair value. HFG is an operating company with a portfolio consisting of individual loans to some 40 companies.

FSC acquired HFG in June 2013.

Fifth Street Finance Corp. is a business-development company that trades on NASDAQ as FSC. It is managed by Fifth Street Management. – Abby Latour

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Jimmy Lee, syndicated loan market pioneer: 1952-2015

James B. Lee’s death earlier this week transcended the syndicated loan market, which he did so much to pioneer and establish in the late 1980s and early 1990s. In his time leading Chemical Bank’s loan team to prominence, Jimmy, as much as anyone, was responsible for putting the modern loan market on the map. He went on to become one of the most powerful deal makers on Wall Street as vice chairman of J.P. Morgan.

For those of us that grew up in the loan market, Jimmy was like Bobby Orr, a legendary athlete who seemed to play the game at a higher level and in so doing taught the rest of us new moves.

We at LCD don’t have much to add to the coverage that’s been in the press. Jimmy’s career has been well chronicled and celebrated. Still, we felt we should acknowledge his untimely passing far too early at 62 and express the collective sadness of the many people in our community that he mentored, touched, and influenced over the years.

Jimmy loved a good pitch, and in his universe the stars always seemed aligned for the next big deal. He was the ultimate rainmaker. – Steve Miller/Chris Donnelly

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EIG hires Rob Johnson to head oil & gas direct lending effort

EIG Global Energy Partners (EIG) announced that Rob Johnson has joined the firm as managing director and U.S. head of oil and gas direct lending, sources said.

Johnson has over 20 years’ experience as a leveraged finance banker, including 14 years in the energy sector. Prior to joining EIG, he spent 17 years with Wells Fargo, most recently as managing director and lead of the leveraged finance team for Energy & Power. He will be based in EIG’s Houston office.

EIG’s direct lending investment strategy is focused on directly originated secured loans to energy and related infrastructure projects and companies on a global basis.

EIG is a leading provider of institutional capital to the global energy industry having supported companies in the sector with bespoke financing solutions since 1982. It invests across the capital structure of energy companies, with discreet strategies focused on direct lending, mezzanine and structured equity, and control equity. EIG specializes in private investments in energy and energy-related infrastructure on a global basis and has $14.8 billion under management as of March 31, 2015. –Staff reports

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Antares Capital to expand junior debt offering under new owner

Antares Capital will expand its product offering in subordinated, or junior debt under new ownership by the Canada Pension Plan Investment Board (CPPIB).

Antares Capital expects to underwrite, and potentially hold, second-lien and mezzanine debt as a result of the new partnership, according to David Brackett and John Martin, who will lead the group under its new owner. Historically, GE Capital and GE Antares had almost focused entirely on senior secure loans.

After weeks of speculation over who would buy the business, GE today announced plans to sell Antares Capital to CPPIB as part of a $12 billion transaction. Speculation had focused on a non-bank lender as the buyer of pieces of the GE Capital assets up for sale, including of a company trying to enter middle market lending.

In buying the GE business, CPPIB makes a debut in the U.S. middle market business with a splash. GE Capital has long reigned as the dominant player in the middle market lending, defined by LCD as lending to companies that generate EBITDA of $50 million or less, or $350 million or less by deal size, although definitions vary among lenders.

Until now, CPPIB’s focus had been on larger deals. Its junior debt business included high-yield bonds and mezzanine debt. Since 2009, CPPIB’s credit investments have totaled $17 billion, through primary and secondary market purchases. CPPIB’s credit investments are managed by a team of 36 globally.

CPPIB will retain Antares’ team. Antares employs around 300, led by managing partners Brackett and Martin, who have led Antares since its formation. Antares will operate as an independent, stand-alone company.

Moreover, Antares will strengthen its unitranche loan product via the new partnership.

“CPPIB Credit Investments will stand ready to immediately invest follow-on capital into Antares post-closing to support origination of unitranche loans for its clients at scale, as we believe this is a differentiated product that will support Antares’ market leading position,” CPPIB said in a statement today.

Any impact on middle market lending overall as a result of GE Capital’s exit is likely to be minimal.

“There truly isn’t going to be any void. Whatever we’ve been able to provide in the past is what we’ll be able to provide in the future,” said Martin in an interview with LCD News.

The Antares purchase will open CPPIB’s credit investment portfolio to the U.S. middle market. GE Antares specializes in middle market lending to private-equity-backed transactions.

“They had been studying the market for some time and liked the risk-reward scenario. This gave them an opportunity to enter the market in a meaningful way, with scale,” said Brackett in the interview.

The geographic footprint of Antares will likely remain much as it is today, with its headquarters in Chicago, a significant presence in New York, and operations near Atlanta. Antares Capital will operate as an independent business, and retain the name.

The sale is expected to close in the third quarter.

The Senior Secured Loan Program (SSLP), so far not part of the sale, will continue to operate for a time prior to the closing of the deal, giving “Ares and CPPIB the opportunity to work together on a go-forward basis.” The SSLP is a joint venture between GE Capital and Ares Capital. Without an agreement, the program may be wound down (see GE’s sale to CPPIB leaves fate uncertain for $9.6B SSLP partnership).

A similar strategy holds for the Middle Market Growth Program (MMGP), which is a joint venture between affiliates of GE Capital and affiliates of Lone Star Funds, GE said. That program accounts for $600 million of GE Capital investment.

GE announced in April it would divest GE Capital, including its $16 billion sponsor finance business and focus on its core industrial businesses. – Abby Latour

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GE selling Antares to Canada pension fund CPPIB as part of $12B deal

GE will sell Antares Capital to Canada Pension Plan Investment Board (CPPIB) as part of a $12 billion transaction.

The sale includes a $3 billion bank loan portfolio. Antares Capital will operate as an independent business, and retain the name. The sale is expected to close in the third quarter.

Managing partners David Brackett and John Martin, who have led Antares since its formation, will continue to lead the stand-alone business. CPPIB will retain the Antares team, a statement today said.

Stuart Aronson, the CEO of GE Capital Sponsor Finance, will stay at GE Capital.

The sale accounts for $11 billion of ending net investment. GE Capital has announced sales of roughly $55 billion, and plans to complete $100 billion of sales this year.

The Senior Secured Loan Program (SSLP) will continue to operate for a time prior to the closing of the deal, giving “Ares and CPPIB the opportunity to work together on a go-forward basis.” The SSLP is a joint venture between GE Capital and Ares Capital.

“If a mutual agreement is not reached, it is GE Capital’s intention to retain the SSLP in the future so that it can execute an orderly wind down of this program ($7.6 billion GE Capital investment, $6.1 billion of which is attributable to Sponsor Finance).”

A similar strategy holds for the Middle Market Growth Program (MMGP), which is a joint venture between affiliates of GE Capital and affiliates of Lone Star Funds, GE said. That program accounts for $600 million of GE Capital investment.

GE announced in April it would divest GE Capital, including its $16 billion sponsor finance business. GE Antares specializes in middle market lending to private-equity backed transactions.

GE Capital has long reigned as the dominant player in the middle market lending, defined by LCD as lending to companies that generate EBITDA of $50 million or less, or $350 million or less by deal size, although definitions vary among lenders.

In May, Ares Capital CEO Kipp deVeer said Ares plans to continue supporting sponsors and businesses, either directly or through a new program with a new partner. This new partner may be looking to expand their lending to the middle market, or be entering the business for the first time.

He cautioned that there was no guarantee that Ares would reach a deal. In recent weeks, Ares has been working with potential parties, including non-U.S. regulated banks and non-banks such as asset managers, insurance companies, and combinations thereof.

GE Capital is not allowed to unilaterally sell the loans in the SSLP. If no partner is found, the SSLP could be gradually wound down through repayment of the loans. The weighted average life of the SSLP loans was 4.3 years at the end of the first quarter. – Abby Latour

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GE selling Antares to Canada pension fund CPPIB as part of $12B deal

GE will sell Antares Capital to Canada Pension Plan Investment Board (CPPIB) as part of a $12 billion transaction.

The sale includes a $3 billion bank loan portfolio. Antares Capital will operate as an independent business, and retain the name. The sale is expected to close in the third quarter.

Managing partners David Brackett and John Martin, who have led Antares since its formation, will continue to lead the stand-alone business. CPPIB will retain the Antares team, a statement today said.

Stuart Aronson, the CEO of GE Capital Sponsor Finance, will stay at GE Capital.

The sale accounts for $11 billion of ending net investment. GE Capital has announced sales of roughly $55 billion, and plans to complete $100 billion of sales this year.

The Senior Secured Loan Program (SSLP) will continue to operate for a time prior to the closing of the deal, giving “Ares and CPPIB the opportunity to work together on a go-forward basis.” The SSLP is a joint venture between GE Capital and Ares Capital.

“If a mutual agreement is not reached, it is GE Capital’s intention to retain the SSLP in the future so that it can execute an orderly wind down of this program ($7.6 billion GE Capital investment, $6.1 billion of which is attributable to Sponsor Finance).

A similar strategy holds for the Middle Market Growth Program (MMGP), which is a joint venture between affiliates of GE Capital and affiliates of Lone Star Funds, GE said. That program accounts for $600 million of GE Capital investment.

GE announced in April it would divest GE Capital, including its $16 billion sponsor finance business. GE Antares specializes in middle market lending to private-equity backed transactions.

GE Capital has long reigned as the dominant player in the middle market lending, defined by LCD as lending to companies that generate EBITDA of $50 million or less, or $350 million or less by deal size, although definitions vary among lenders.

In May, Ares Capital CEO Kipp deVeer said Ares plans to continue supporting sponsors and businesses, either directly or through a new program with a new partner. This new partner may be looking to expand their lending to the middle market, or be entering the business for the first time.

He cautioned that there was no guarantee that Ares would reach a deal. In recent weeks, Ares has been working with potential parties, including non-U.S. regulated banks and non-banks such as asset managers, insurance companies, and combinations thereof.

GE Capital is not allowed to unilaterally sell the loans in the SSLP. If no partner is found, the SSLP could be gradually wound down through repayment of the loans. The weighted average life of the SSLP loans was 4.3 years at the end of the first quarter. – Abby Latour

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Matkins joins HSBC for leveraged and acquisition finance

HSBC has hired Brett Matkins as a managing director in its leveraged & acquisition finance group in North America. He will report to Richard Jackson, global head of the business unit, and be based in New York City, according to the firm.

Matkins will focus on product origination and structuring for HSBC’s large corporate commercial banking and key financial sponsors clients, according to the firm.

Matkins was formerly head of high-yield bond capital markets for the Americas at RBS Securities. Prior to that, Matkins worked in high-yield capital markets positions at UBS and First Union. – Staff reports