Tai joins Newfleet as firm expands into distressed debt

Newfleet Asset Management today announced it has hired Edwin Tai as a senior managing director and senior portfolio manager for distressed credit.

Tai’s position is a new one for the firm, which recently filed a registration statement with the SEC for the Virtus Credit Opportunities Fund, a new open-end mutual fund with the latitude to invest in distressed debt.

He will manage the Virtus Credit Opportunities Fund as well as act as the sector head for distressed credit in multi-sector portfolios.

Tai joined Newfleet from Third Avenue Management, where he co-managed approximately $2.5 billion in distressed and high-yield credit assets as the lead portfolio manager of the Third Avenue Special Situations Fund and co-portfolio manager of the Third Avenue Focused Credit Fund.

Newfleet also recently brought on board Patrick Fleming as a managing director and senior counsel for distressed credit. The distressed debt team also includes Manases Zarco, managing director, credit research.

The Virtus Credit Opportunities Fund plans to invest in various debt products, including senior secured loans, second-lien debt, unsecured debt, subordinated debt, structured products and short-term debt products, as well as derivatives, foreign currencies and foreign currency derivatives, SEC filings show. It intends to focus on a small number of issuers and may invest in distressed or defaulted debt.

Newfleet is an affiliate of Virtus Investment Partners, which manages more than $12 billion of fixed-income assets. – Kerry Kantin


Ares Management fund acquires loan portfolio from First Capital

Ares Management will expand its commercial finance platform through the acquisition of an asset-based lending portfolio from First Capital.

First Capital’s investment team will join the Ares Commercial Finance team. Loan commitments under the Ares Commercial Finance platform will total $700 million through the portfolio acquisition.

New York-based First Capital provides asset-based loans and factoring to small and middle-market manufacturing, distributing, and business services companies generating sales of at least $1 million. First Capital is a portfolio company of H.I.G Capital. – Abby Latour

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Newtek Business Services hires Choksi, Fifth Street finance executive

Newtek Business Services Corp. announced that Dean Choksi would join the company as treasurer and senior vice president of finance.

Previously, Choksi was executive director of finance from Fifth Street Management.

At Fifth Street Management he assisted in the raising of over $1 billion in public debt and equity, and was the primary contact for multiple lenders for their syndicated bank credit facility. Fifth Street Asset Management manages two publicly traded BDCs, Fifth Street Finance Corp. (FSC) and Fifth Street Senior Floating Rate Corp. (FSFR).

Choksi also worked at UBS Investment Bank, where he was director of U.S. equity research, and led equity coverage of consumer finance and specialty finance companies, including BDCs.

He has also held equity research roles at Barclays Capital, Lehman Brothers, RBC Capital Markets, Wells Fargo Securities, and SoundView Technology Group.

Newtek Business Services Corp., a BDC that trades on the Nasdaq as NEWT, is an internally managed BDC that provides services and financial products to small and midsize businesses, including electronic-payments processing, lending, accounts-receivable financing, web services, and data backup and storage. It converted to a BDC in November 2014.

Early this year, Newtek Business Services was added to the Wells Fargo BDC Index. – Abby Latour

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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

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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