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
Follow Abby on Twitter.
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.