Sycamore Partners taps Fossati as Director of Capital Markets

Sycamore Partners this morning announced that Paul Fossati has joined the firm as a managing director and Director of Capital Markets.

In this newly created role, Fossati will be responsible for all financings for the firm’s new investments and its existing portfolio companies. He will also be responsible for managing Sycamore’s relationships with financing sources.

Fossati was previously at Morgan Stanley, where he was a managing director in the firm’s Leveraged & Acquisition Finance Group and head of both the consumer-retail and financial sponsor verticals.

New York-based Sycamore Partners is a private equity firm specializing in consumer and retail investments. The firm has more than $3.5 billion in capital under management. Its portfolio currently includes Aeropostale, Coldwater Creek, Hot Topic, Jones New York, the Kasper Group, Kurt Geiger, MGF Sourcing, Nine West Holdings, Pathlight Capital, Stuart Weitzman, and Talbots. – Kerry Kantin


Capitala and Kemper form new loan-focused JV fund

Business-development company Capitala Finance Corp. has formed a new investment joint venture with Trinity Universal Insurance Company, a subsidiary of Kemper Corp. The new venture, Capitala Senior Liquid Loan Fund I, will focus on investments in broadly syndicated loans beginning in the second quarter.

The initial equity contribution is $25 million, of which Capitala is funding $20 million and Trinity is providing $5 million. In addition to that the new fund secured third-party asset-level financing.

Capitala Finance, a BDC that trades on the Nasdaq under the ticker CPTA, traditionally targets debt and equity investments in middle-market companies generating EBITDA of $5-30 million. The firm focuses on mezzanine and subordinated deals but also invests in first-lien, second-lien and unitranche debt. Capitala’s portfolio as of Dec. 31 consisted of 52 portfolio companies with a fair market value of $480.3 million. Of that total, 31% was senior secured debt investments, 46% was subordinated debt, and 23% was equity and warrants. – Jon Hemingway


Europe: Biagosch joins Portfolio Value Creation group at CPPIB

Maximilian Biagosch has joined the CPP Investment Board as a senior principal in the Portfolio Value Creation group (PVC), according to market sources. The role is an operational one focusing on the day-to-day management of the private equity and infrastructure assets acquired by the firm.

The new role is a continuation of Biagosch’s previous role at Permira Advisors, where he worked for seven years, most recently as head of the Financing Group. At CPPIB he joins former Permira colleague Paul Mullins, who is now global head of the PVC group.

As of Sept. 30, 2014, Toronto-headquartered CPPIB had CAD$234 billion of capital under management globally, with other offices in New York, London, Hong Kong, and Sao Paulo. The London office has 84 employees (as of Sept. 30), working across CPPIB’s three investment departments: Private Investments, Public Market Investments, and Real Estate Investments. – Sarah Husband

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Alcentra names Hatfield as global CIO, Yang as head of the Americas

Alcentra today announced several executive leadership appointments, with Paul Hatfield returning to the Group’s global headquarters in London in an expanded role as global chief investment officer. He will lead the firm’s initiatives related to multi-strategy credit portfolio management and customized investment solutions.

Jack Yang succeeds Paul Hatfield, as Alcentra’s head of the Americas, while retaining his responsibilities as global head of business development. In his new role, Yang is responsible for the firm’s business operations in the Americas, and product development, marketing, fundraising and investor relations globally.

Both report to David Forbes-Nixon, Alcentra’s chairman and CEO. – Sarah Husband


Lloyds appoints four to leveraged loan market team

Lloyds today announced four appointments to its loan market team, with Alaric Fountain-Barber and Alessandro Valenti joining the firm’s leverage debt capital markets business.

Fountain-Barber, who was most recently at Barclays Capital, is understood to have started at the U.K. bank today as a director. He has previously worked in leveraged finance roles at Societe Generale CIB and UBS.

Valenti has made an internal move from Lloyd’s corporate capital structure advisory team to its leverage finance business. Previously, he has worked as a structured finance analyst at Fitch.

Both Fountain-Barber and Valenti report to Carlo Fontana, head of leverage debt capital markets.

Elsewhere in the Lloyds loan team, Nadia Jalal has moved internally from the global corporates relationship team to become an associate within the corporate loan capital markets business, while Ab Shome has joined the bank from RBS as a director on the loan markets real-estate team. – Nina Flitman


Griffin Capital, Benefit Street file IPO plans for middle-market BDC

Griffin-Benefit Street Partners BDC Corp. today filed plans to sell up to $1.5 billion of common stock in an IPO.

The company, a new BDC, will invest in debt and equity of middle-market companies. Griffin Capital BDC Advisor (GBA), an affiliate of Griffin Capital, will manage the BDC.

The senior management team of GBA will comprise Kevin A. Shields, David Rupert, Joseph Miller, Randy Anderson, and Howard S. Hirsch.

Rupert will be CEO of the new BDC. Investment decisions require unanimous approval of the investment committee, comprised of Shields, Rupert, Miller, and Anderson.

Investment professionals of Benefit Street Partners, an affiliate of Providence Equity Partners, will serve as sub-advisors to GBA. They include Richard J. Byrne, Thomas J. Gahan, Michael E. Paasche, David J. Manlowe, and Blair D. Faulstich.

Providence Equity Partners was founded as a private equity firm specializing in media, communications, education, and information sectors, and has since expanded into credit. It had more than $40 billion under management as of Nov. 30, 2014.

Investments could include senior secured, unitranche, and second-lien debt, senior unsecured and subordinated debt, and equity and equity-related securities, either issued by private U.S. companies or public ones with a market capitalization of up to $250 million. The company may invest in syndicated deals.

Investments will range from $5-$50 million initially.

“We believe that investing in the debt of private companies generally provides a more attractive relative value proposition than investing in broadly syndicated debt due to the conservative capital structures and superior default and loss characteristics typically associated with these companies,” said the prospectus, filed by the company on Dec. 23.

“The prevailing investment environment presents a compelling case for investing in secured debt of private U.S. companies primarily in the middle market.”

Shares won’t trade on an exchange. The company plans to carry out quarterly tender offers beginning one year after the initial share sale of at least $2.5 million. The IPO is aimed at a broad high-net-worth market, with a minimum purchase requirement of $2,500.

The company has applied for SEC approval to co-invest with other funds managed by Benefit Street, GBA, and affiliates.

Griffin Capital is a privately held investment management company based in Los Angeles that’s focused on real estate investments in the U.S. and Britain and managing institutional capital. – Abby Latour

Follow Abby on Twitter @abbynyhk for middle-market deals, leveraged M&A, distressed debt, private equity, and more


Wilshire Associates launches index tracking debt-focused BDCs

Wilshire Associates has launched an index tracking debt-focused BDCs.

The Wilshire BDC Index will track publicly traded BDCs with at least 75% of their total investment portfolio focused on debt, and at least $100 million of market capitalization.

The top five holdings are Ares (ARCC) at 23%, Prospect Capital (PSEC) at 14%, Apollo (AINV) at 8%, Main Street Capital (MAIN) at 7%, and Fifth Street Finance (FSC) at 6%.

“Investors have been chasing yields in bonds and bank loans, as well as tax-advantaged equities, and the Wilshire BDC Index measures performance for investment instruments that seek to combine the best of both asset classes,” said Robert Waid, managing director of Wilshire Analytics.

Wilshire Associates manages a stable of indices, including the Wilshire 5000 Total Market Index, which tracks all U.S. equity securities with readily available prices. – Abby Latour


Capital One Bank hires Gates to head leveraged loan syndications

Capital One Bank appointed William Gates as head of loan syndications.

Gates will report to Steven Tulip, head of capital markets at the McLean, Virginia-based bank. Gates and Tulip are based in New York.

Gates had been a managing director at RBS, where he was responsible for the underwriting and distribution of all loan transactions in the Americas.

Gates was also a managing director in leverage capital markets with UBS. He also worked at Merrill Lynch in Leverage Loan Capital Markets, and was a founding member of Lehman’s loan syndicate group. – Abby Latour

Follow Abby on Twitter @abbynyhk for middle-market deals, leveraged M&A, distressed debt, private equity, and more


Monroe Capital settles with ex-employee Woo, dismisses lawsuit

monroe-capital-corp-logoMiddle-market lender Monroe Capital has dismissed a lawsuit against a former employee, Warren Woo, saying the two sides have reached a “mutually satisfactory settlement arrangement.”

In June, Monroe terminated Woo, a managing director, for allegedly stealing proprietary information and siphoning-off trade secrets to a new firm, Breakaway Capital.

“Upon further investigation, it is clear that Warren’s actions were not improper,” Monroe Capital CEO Ted Koenig said in a statement issued by Breakaway Capital today.

Woo will remain a limited partner of Monroe Capital. As a result, “I look forward to remaining economically aligned with Monroe going forward,” Woo said in a statement.

Contacted by LCD, Koenig gave no further explanation, and said he could not comment on a former employee. Woo did not respond to an email seeking comment.

In the statement, Breakaway Capital said it was focused on companies generating up to $5 million in annual EBITDA. The firm said it provides senior debt, subordinated and mezzanine debt, unitranche structures, and equity to companies for buyouts, acquisitions, recapitalizations, restructurings and growth capital, for sponsored and non-sponsored transactions.

A complaint filed on June 19 by Monroe Capital with the Circuit Court of Cook County, Ill., alleged that for more than 18 months, Woo forwarded hundreds of emails to another email account at Breakaway Capital. He then deleted the forwarded emails from his sent-items folder at Monroe Capital to avoid detection.

Some of the emails instructed recipients to communicate with Woo in the future at Breakaway Capital only.

“Woo and his new company, acting in concert with his new partner and Breakaway Capital co-founder, Michael Connolly, arrogated to themselves critical business opportunities which belonged to Monroe Capital and which Woo had a clear duty to consider the exploit for Monroe Capital and not for his new company and new partners,” the complaint said.

Included in the 308 emails Woo forwarded, as well as 157 attachments, were new business prospects, individual deal structures and pricing memos, internal underwriting analysis, and third-party analysis that Monroe Capital paid for as part of new business pitches.

Monroe Capital uncovered the scheme after the firm received an SEC subpoena requesting information about Breakaway Capital. As a result of the subpoena, Monroe looked into Woo’s email.

“The investigation revealed that not only did Woo improperly transfer confidential and proprietary company and customer information and trade secrets, but that he actively intends to use this information to compete with Monroe Capital by taking deal source leads generated by Monroe Capital and made, or attempted to make, them his own for his benefit and that of Breakaway Capital.”

“Monroe Capital has suffered irreparable harm as a result of Woo’s unlawful conduct,” the complaint said.

Woo and Michael Connolly founded Breakaway Capital as a limited partnership.

Breakaway Capital, based in Los Angeles, is a private investment firm with $50 million of committed capital, seeking debt and structured equity investments in small and middle-market businesses across a variety of industries, the company’s website said. The company was formed in March 2014, the complaint said.

Chicago-based Monroe Capital, established in 2004, provides debt and equity co-investments to middle-market companies in North America, including unitranche financings, acquisition facilities, mezzanine debt and second-lien loans. – Abby Latour

Follow Abby on Twitter @abbynyhk for middle-market deals, leveraged M&A, distressed debt, private equity, and more


AXA Investment Managers reorganizes fixed income/structured finance units

urlAXA Investment Managers (AXA IM) has reorganised its Fixed Income and Structured Finance teams, to create a new Fixed Income and Structured Finance department.

The reorg is intended to provide clients with a simpler structure, as well as facilitate the integration of structured finance assets into traditional fixed income so AXA IM can offer solutions which address changing client needs across the credit spectrum. The entire department reports in to John Porter, global head of fixed income & structured finance.

The Fixed Income & Structured Finance division is now organised into five broad investment streams:

  • Active Fixed Income – encompassing all actively managed strategies, including traditional benchmarked, total return, and strategic.
  • Buy and Maintain Fixed Income – encompassing all long-term, low-turnover solutions for third-party pension scheme and insurance clients – including SmartBeta Credit and accounting constrained.
  • Solutions – a new team under the leadership of Jean-Louis Laforge, which brings portfolio engineering and credit research together with a solutions strategy team responsible for designing solutions across the credit spectrum.
  • AXA Group – a dedicated team led by Gilles Dauphine, focused on work with AXA Group.
  • Structured Finance – organised around two platforms: Loans & Private Debt, and Securitised & Structured Assets, and led by Deborah Shire.

Chris Iggo, CIO and head of fixed income Europe & Asia, leads the European, Asian, and Global teams within Buy and Maintain Fixed Income and Active Fixed Income, with the U.S. teams reporting into Carl Whitbeck, head of fixed income U.S.

Digging down further into the Structured Finance unit, this will be organised around two platforms: Securitised & Structured Assets and Loans & Private Debt, with each split between ‘traded assets’ and ‘illiquid assets’.

Securitised & Structured Assets:

  • Alexandre Martin Min will co-head Securitised & Structured Assets, with responsibility for traded assets. He will also lead a strategy dedicated to integrating structured finance assets into fixed income blended products across the credit spectrum. Within Alexandre’s team, Gaelle Philippe will be responsible for ABS Europe and existing ABS products.
  • Christophe Fritsch will co-head Securitised & Structured Assets, responsible for illiquid assets and the business development of this platform. He will continue to lead the ILS team that he started in 2007, but Francois Divet will take on the direct responsibility for the ILS team.

Loans & Private Debt:

  • Jean Philippe Levilain will co-head the Loans & Private Debt platform for traded assets, and be responsible for delivering AXA’s leveraged loan expertise in funds, mandates, and CLOs, with a team split between Europe and the U.S. He launched AXA’s first CLO post-crisis in the U.S., in 2014.
  • Renaud Tourmente will co-head the Loans & Private Debt platform, with a direct responsibility for illiquid assets, including the mid-cap platform he launched more than two years ago.
  • Laurent Cezard will head the business development team for the Loans and Private Debt Platform. – Staff reports