a leading provider of middle market financing solutions including senior term, unitranche, second lien, junior secured, and mezzanine debt; and equity co-investments to companies with EBITDA generally greater than $10 million. We have more than $1.4 billion of capital under management.
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Business development company. Some examples would be: ACAS, AINV, FSC, TCRD, SUNS, SLRC...
also sounds like a pe/mezz fund
basically just a debt provider. not so much a mezz fund because it does provide senior terms and usually mezz fund does a lot unsecured stuff
Which category would it fall under? A commercial bank?
No. The official name for this structure is "business development company" (for IRS and SEC purposes at least). It's considered specialty finance. They originate below investment grade loans usually in PE sponsored deals (can be unsponsored though but that market is not that active right now) and they can also do PE investments themselves.
A lot of PE firms have these types of "sister funds" or BDCs for mezz and high yield loans. ACAS = American Capital's BDC, AINV = Apollo's BDC, KFN = KKR's BDC, TCRD = Thomas Lee's BDC...etc.
I had a phenomenal powerpoint bookmarked that walked exactly through what a BDC is, its legal nomenclature and status, how it operates, and the largest players in the game right now. I stupidly deleted it after reading it a few times and can't find it on Google. Here's the best substitute I found, I believe from the same firm but probably not. Sutherland was in the name of the firm though.
http://www.sutherland.com/files/Publication/88a2185b-e308-4899-91c9-6d8…
How does this differ from the debt capital markets group of a bank though. They are both in business to structure debt for clients
bdc's dont structure debt for clients, they invest in debt
A lot of times if you work in lev fin you'll interact with BDC's though. Ex: bdc's will be the ones buying the debt you structure/sell, especially for mid-market lbo's or 2nd lien tranches on LBOs. Or alternatively, the bank might arrange a larger syndicated sr. sec. loan and then a bdc will work directly with a sponsor to structure a mezz tranche and hold the entire piece itself.
If by DCM you are referring to investment grade debt capital markets, though, you'll never actually interact with BDC's, as the two play in completely different spaces.
and with a bit of googling, I now know exactly what fund you are referring to. It does basically the same stuff as a BDC though is structured just as a private closed-end debt fund rather than as a BDC.
It seems like they have a 1.75/20 fee structure on $1.2B, so pay is likely decent (though on the flip side they seem pretty heavily staffed for a fund that size). Likely a pay cut to a PE fund of the same size though since expected returns (and thus the $ from the 20%) are slightly lower.
The actual work you would do is pretty similar to that of a lower mid-market pe shop, though you'll look at more deals in less depth and will generally piggy-back off the work the PE guys do.
Big thanks to everyone. Last question, why does it say they are a provider of financing solutions then? If they simply invest in debt. That sounds more like an investment management company
Looks like a middle-market leverage lender/BDC/specialty finance group. These have been growing since the recession (Monroe Capital, Fifth Street Finance, Triangle Capital, etc., as well as the firms mentioned by posters above).
Definitely not commercial banking, as this is more deal-oriented, and almost entirely sponsor focused. Further, these guys actually raise funds, like a private equity group, with some raising publicly.
I have special interest in BDCs actually. The view right now is that these guys will gain market share (from traditional large lenders due to increasing regulation) and their position will strengthen as our economy recovers. There is a nearly 0.80 correlation between BDC (as a group) earnings and real GDP growth. I would expect BDCs to raise some serious capital in the next 2-3 years for growth/new investments. Probably a good time to get into this business.
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