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Webster Bank Hires Torrado, Formerly of CIT, for Capital Markets

Webster Bank has hired Paco Torrado as senior vice president and director, Capital Markets.

He will be based in New York. He reports to Andre Paquette, senior vice president and senior relationship manager, Commercial Banking.

Torrado most recently was at CIT Group in New York, where he worked for ten years, focused on structuring and syndication of middle market debt financing.

He also worked as a distressed and special situations analyst at J. Giordano Securities. Prior to that, he spent six years at CIBC World Markets, where he managed a corporate loan trading book. — Abby Latour

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This story first appeared on www.lcdcomps.com, LCD’s subscription site offering complete news, analysis and data covering the global leveraged loan and high yield bond markets. You can learn more about LCD here.

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Young Exits Och-Ziff to Co-Found New Alternative Asset Manager

Don Young has left his position as managing director at Och-Ziff Capital Management to establish a new asset management firm, according to market sources.

Young will join forces with Mike Damaso and Jay Garrett as co-founders of the new firm, which will be a diversified alternative asset manager (including CLOs), and which is expected to launch later this year, according to market sources.

Eldridge Industries is a key investor in the new firm. Eldridge also acts as a holdco for Security Benefit.

Young has worked at Och-Ziff since September 2013, and previously has held positions at Octagon Credit Investors and Primus Asset Management. Damaso was previously chairman of the investment committee overseeing corporate credit investing and a portfolio manager for the NZC Guggenheim Fund. Garrett was previously at Matlin Paterson. — Sarah Husband

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Onex Launches Direct Lending platform, Taps Goldman Sponsor-Finance Veteran

Onex Credit is launching a direct lending platform, including to middle market companies, and has hired Walt Jackson to lead it.

The platform will lend to non-investment-grade middle market and larger companies. CEO Michael Gelblat leads the Onex Credit team from Englewood Cliffs, New Jersey.

Jackson was at Goldman Sachs for 19 years, most recently as COO of the Private Credit Group of its merchant banking division, which provides senior loans and mezzanine debt to companies, and as a senior credit officer of the private credit group. Jackson also originated sponsor financing at The Bank of Nova Scotia, where he worked for 10 years, and he worked in leverage finance at Credit Suisse.

Onex Credit joins a growing list of players expanding into middle market lending for sponsor-backed companies, a business dominated by Antares Capital, Golub Capital, and Ares.

New lenders to the middle market say smaller companies are underserved by banks, which have backed away from the sector since the financial crisis due to increased regulation.

KKR & Co.’s head of energy and infrastructure investing Marc Lipschultz announced in February he would start a credit fund with Doug Ostrover, co-founder of the credit investor GSO Capital Partners that was acquired by Blackstone, Bloomberg reported. The news firm, Owl Rock Capital, will lend to small and middle market companies across industries.

H.I.G. WhiteHorse, the credit affiliate of H.I.G. Capital, announced in February it hired Stuart Aronson to head its U.S. Direct Lending team. Aronson had been CEO of GE Capital’s sponsor finance group.

A year ago, TIAA-CREF unveiled a standalone business, called Churchill Asset Management, to lend mainly to U.S. middle market companies.

The venture includes George Kurteson as head of underwriting and portfolio management, and Randy Schwimmer as head of origination and capital markets. Kenneth Kencel leads the New York-based team. Churchill hired Christopher Cox as chief risk officer in July.

The direct lending unit of TCW Group formed a middle market lending venture together with Security Benefit and Oak Hill Advisors in June last year. TCW Direct Lending and partners committed roughly $1 billion to the initiative, called TCW Direct Lending Strategic Ventures.

The previous year, AllianceBernstein launched a platform, AB Private Credit Investors, to lend to U.S. middle market companies. The platform, which is led by Brent Humphries, ex-president of Barclays Private Credit Partners, includes several former senior team members from Barclays and has $2.5 billion of investable capital.

A joint venture between American International Group (AIG) and affiliates of Oak Hill Capital Partners launched in June 2014, called Varagon Capital Partners, backed by an initial $1.5 billion investment commitment from AIG. In June last year, Ares Capital named Varagon as its new partner for middle market lending.

The trend toward an increasing number of players, particularly in the smaller tier of the market, is similar across the Atlantic.

Europe’s direct-lending market grew last year as institutional players raise ever-larger funds to compete for a piece of the rapidly expanding market. A report by debt advisory firm Marlborough Partners for the fourth quarter of 2015 said the number of credible direct lenders in Europe exceeds 70, with dry powder by fund ranging from €250 million to more than €2–3 billion. — Abby Latour

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This story first appeared on www.lcdcomps.com, LCD’s subscription site offering complete news, analysis and data covering the global leveraged loan and high yield bond markets. You can learn more about LCD here.

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Middle market: Great Rock Capital hires Hogan as chief risk officer

Great Rock Capital announced that Jim Hogan will join the firm as chief risk officer, responsible for underwriting, due diligence, and documentation of middle-market financing transactions.

He reports to Stuart Armstrong, chief executive officer and chief investment officer.

Previously, Hogan was head of retail financing origination at Regions Financial . Prior to Regions, he worked for over 15 years at GE Capital Corporate Lending, where he was commercial leader of restructuring and retail finance. Hogan also worked at other origination, capital markets, and special situation roles at ING Capital, Heller Financial, and Deloitte & Touche.

In December, Great Rock Capital Partners and Two Sigma Private Investments announced the launch of a lending platform for middle-market companies.
The lending platform will provide asset-based and asset-backed loans. Loans will focus on refinancings, growth capital, bridge loans, rescue capital, bank replacement financings, acquisition, and restructuring financings.

CEO Armstrong had been president of Great American Group’s specialty lending division, GA Capital, and CIO of Great American Capital Partners. He co-founded Tygris Commercial Finance and was executive vice president there. He was also president of Tygris Corporate Finance, CEO of Black Diamond Commercial Finance, and senior managing director for GE Corporate Lending’s Vertical Industries.

Two Sigma Private Investments is the private markets investment division of Two Sigma. Great Rock Capital Partners is a Connecticut-based investment-management firm focusing on secured lending products for middle-market companies. — Abby Latour

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This story first appeared on www.lcdcomps.com, LCD’s subscription site offering complete news, analysis and data covering the global leveraged loan and high yield bond markets. You can learn more about LCD here.

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Leveraged Finance Fights Melanoma benefit planned for May 24

The fifth annual Leveraged Finance Fights Melanoma benefit and cocktail party is planned for May 24 at the Summer Garden and Sea Grill at Rockefeller Center. Funds raised at the event will support the Melanoma Research Alliance (MRA), the world’s largest private funder of melanoma research, which was founded in 2007 by Debra and Leon Black under the auspices of the Milken Institute.

Since this event was launched in 2012, the leveraged finance community has come together and generously supported over $5 million of cutting-edge cancer research. These funded studies have accelerated advances in immunotherapy treatments that have led to breakthroughs like anti-PD-1 agents which are being used to treat melanoma, were recently approved to treat lung cancer, and are now being tested in other tumors including bladder, blood, and kidney cancers.

The event co-hosts are Brendan Dillon from UBS; Lee Grinberg from Elliott Management; George Mueller from KKR; Jeff Rowbottom from PSP Investments; Cade Thompson from KKR; and Trevor Watt from Hellman & Friedman. Attendees include the biggest names in leveraged finance, from all of the top banks, many investment houses, several law firms, select issuers, and some private equity sponsors. As with the prior events, LCD is a proud sponsor.

Due to ongoing operational support from its founders, 100% of donations to MRA go directly to support research programs working toward a cure for melanoma, the deadliest type of skin cancer. Since MRA began its work, 11 new treatments have been approved by the FDA.

Funds raised from prior year events have supported six MRA research awards at institutions spanning the U.S. These projects focus on targeted and immunotherapy treatments, which boost the immune system to fight off cancer more effectively. The studies address critical research questions to advance the development of new therapies for melanoma patients and inform progress against cancer as a whole.

“We’re making tremendous breakthroughs in understanding and treating melanoma, including several new therapies that could be game-changers for the entire field of oncology,” said Jeff Rowbottom, LFFM co-host and MRA board member. “The Leveraged Finance Fights Melanoma events have supported important research that is enabling innovations in the way we treat cancer.”

The objectives for the 2016 LFFM event are to increase awareness, to raise funds to further advance research, and to save lives. Melanoma awareness and early detection are vital when it comes to combating the disease; if melanoma is detected early—before it has spread beyond the skin—it is almost always treatable. Past events have led to many members of the leveraged finance community seeing dermatologists for skin checks and even to the discovery and treatment of several early stage melanomas.

Tickets are $300. For further information about the event and to purchase tickets, please visitcuremelanoma.thankyou4caring.org/lffm2016. Those seeking information about the event and sponsorship opportunities can contact Rachel Gazzerro of MRA at (202) 336-8947 or RGazzerro@curemelanoma.org. — Staff reports

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IT’SUGAR nets $21M loan from New Mountain Finance

IT’SUGAR received a $21 million first-lien term loan due 2019 (L+950) from New Mountain Finance Corp. in the most recent fiscal quarter.

The investment also included equity warrants, New Mountain’s10-K for the year ended Dec. 31 showed. IT’SUGAR is a portfolio company of middle market consumer brand firm Star Avenue Capital.

IT’SUGAR is a specialty retailer selling candy and gifts, including bags, accessories, baby products, jewelry, and headphones. It is the exclusive home for the world’s largest boxes of Nerds, Laffy Taffy, Gobstoppers, Sweetarts, and Pop Rocks.

The Deerfield Beach, Fla.–based company was founded by CEO Jeff Rubin and operates more than 80 locations around the U.S. and in London, Dubai, and Grand Cayman.

New Mountain Finance is a BDC that invests in debt, and some equity, targeting high-quality defensive growth companies. New Mountain Finance Advisers BDC manages investment activities. Shares trade on NYSE under the ticker NMFC. — Abby Latour

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Macquarie Appoints Callaghan as Head of UK Financial Sponsors

Macquarie Capital announced today that Jacques Callaghan has been appointed senior managing director and head of UK financial sponsors. Callaghan will be based in London from March 2016, and will report to Daniel Wong, head of Macquarie Capital Europe.

Callaghan joins Macquarie Capital from Canaccord Genuity, where he was previously co-head of European investment banking and head of financial sponsors coverage, and built a private equity practice. He was also head of financial sponsors at Hawkpoint prior to being acquired by Canaccord Genuity.

Callaghan brings more than 20 years’ experience and has advised financial sponsors on more than 100 transactions, including the listings of Foxtons and Patisserie Holdings, as well as the acquisitions of ICS by Towerbrook, Opsec by Investcorp, andAdelie by HIG Capital. He also worked on the disposals of Moneycorp to Bridgepoint, and Whittan Storage to Bregal Capital.

The hire follows Macquarie Capital’s appointment of Hugh Briggs as head of principal transactions, Europe in December 2015. As reported, Briggs will also be based in the London office. — Staff reports

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Europe: Coleman, Marsh promoted to new EMEA roles at Goldman Sachs

Goldman Sachs has promoted Denis Coleman and Michael Marsh to new roles as head of the EMEA financing group and head of EMEA leveraged finance, respectively.

In his new role, Coleman will focus on continuing to grow Goldman Sachs’ franchise and integrating its financing businesses across equity, credit, and derivative products in the region.

Coleman has been at the bank for 20 years, and was named managing director in 2005 and partner in 2008. During his time he has worked in various divisions including Capital Markets in the fixed income, currency and commodities division, and the investment banking division (IBD), where became co-head of loan capital markets. In 2008 he was named co-head of leveraged finance, and in 2009 he was named head of EMEA credit finance.

Meanwhile, as head of EMEA leveraged finance, Marsh will work with Littleton Glover, head of EMEA leveraged finance origination, to focus on the bank’s client relationships and driving commercial opportunities in the region. He is currently head of EMEA high-yield and leveraged loan capital markets.  He joined Goldman Sachs in 2006, and was named managing director in 2008 and partner in 2014.

In addition, Jim Esposito, co-head of the global financing group, will join the bank’s securities division as chief strategy officer. Prior to becoming co-head of the global financing group, Esposito was head of the EMEA financing group for two years, and before that, he was chief operating officer of IBD. He joined Goldman Sachs in 1995 as a salesperson in FICC for emerging markets debt, and was named managing director in 2002 and partner in 2006. — Staff reports

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Middle market: Cadence Credit Partners launching today, founded by Miller Buckfire’s Kubick

Cadence Credit Partners, a new independent capital markets advisory firm specializing in strategic finance, is launching today.

The founder of the firm is Ron Kubick.

Cadence Credit Partners will specialize in arranging secured credit facilities of $35–500 million for public, private, and sponsor-owned companies that are undergoing a turnaround, executing an acquisition, or need incremental working capital.

Cadence Credit Partners intends to draw upon established relationships with regulated and non-regulated sources of financing, including commercial banks, investment banks, insurance companies, BDCs, specialty finance companies, family offices, and credit hedge funds.

Prior to launching the new firm, Kubick was a managing director at Miller Buckfire & Co. Also, Kubick created and led strategic finance groups at Morgan Stanley and Barclays Capital, and he was a founding member of GE Capital’s Retail and Restructuring Finance Group.

The firm will have offices in New York and is actively recruiting for up to two associate level positions and one director level banker. Each position will have deal-execution responsibilities and direct client interaction. — Abby Latour

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Tiny BDC, pursued by activist, announces plan to liquidate

Crossroads Capital, a tiny BDC once targeting pre-IPO equity, announced this week it would liquidate its investment portfolio and distribute cash to shareholders.

This news comes after activist Bulldog Investors became the largest shareholder of the company, previously called BDCA Venture. BDCA Venture changed its name from Keating Capital in July 2014.

Crossroads Capital’s investments are in preferred stock, common stock, subordinated convertible bridge notes, subordinated secured notes, and equity warrants, although under previous management the company made an eleventh-hour attempt to switch to a debt strategy.

However, as of Jan. 25, the company’s investment strategy became “preservation of capital and maximization of shareholder value,” and will immediately pursue a sale of investments.

The plan to liquidate “was made after considerable analysis, review and deliberation. Both management and the board believe this is the most efficient way to deliver the company’s underlying value to our shareholders,” a Jan. 25 statement said.

Among the investments in the portfolio as of Sept. 30 are social media content company Mode Media, ecommerce network Deem, online dating company Zoosk, software company Centrify, renewable oils company Agilyx, human resources software company SilkRoad, waste management company Harvest Power, and solar thermal energy company BrightSource Energy.

Net assets totaled $54.5 million as of Sept. 30, 2015, or $5.63 per share, consisting of 12 portfolio company investments with a fair value of $39 million and cash and cash equivalents of $16.2 million. Shares in Crossroads Capital, which trade on Nasdaq as XRDC, closed at $2.10 yesterday.

In September 2014, the company’s previous board approved a change in strategy to focus on debt of private companies, moving away from venture equity. The change was part of then-management’s attempt to reduce the company’s stock discount to NAV.

But this plan was too little, too late, for some.

In May, Bulldog Investors filed a proxy statement soliciting support for a plan to elect its own board members, terminate an external management agreement with BDCA Adviser, and pursue a plan to maximize shareholder value through liquidation, a sale, or a merger.

Bulldog Investors criticized the strategy to convert BDCA Venture away from venture capital–backed or high-growth companies into an income-oriented fund, saying the BDC’s small size and high expense ratio meant the plan was “almost certainly doomed to fail.”

BDCV’s shares were trading at $5.05 at the time the proxy was filed in May 2015, a 25% discount from its March 31 NAV of $6.71. That compared to a listing price of $10 at the time of the company’s IPO on Nasdaq in December 2011.

In contrast, BDCV’s expenses in the three years prior to the proxy totaled $13.25 million, or $1.33 per share, according to the Bulldog proxy.

The plan laid out in May 2015 has more or less come to pass.

In July, shareholders elected Bulldog-nominated directors Richard Cohen, Andrew Dakos, and Gerald Hellerman. A proposal to terminate the investment advisory agreement with BDCA Venture Adviser failed to pass in a vote at the 2015 annual meeting, but was approved by the board in October.

CEO Timothy Keating resigned in late July, replaced by COO Frederic Schweiger. Around that time, the company held equity investments in 12 portfolio companies, 11 of which were private portfolio companies and the other which was publicly traded Tremor Video. The company did not expect any of the private companies to complete an IPO in 2015.

Schweiger resigned as CEO in December, and was replaced by Ben Harris. Harris is a director of NYSE-listed Special Opportunities Fund.

At the same time, BDCA Venture announced a name change to Crossroads Capital. The ticker changed to XRDC on Nasdaq, from BDCV. — Abby Latour

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