Since announcing its entrance into the asset-based lending market less than a year ago, Wingspire Capital has established itself as a competitive player in the industry. David Wisen, John Rosin and Ken Wendler explain how creativity and remaining humble have powered their first-year success and growth plans.
The creation of Wingspire Capital was a collaborative endeavor that merged the ideas and ambitions of David Wisen and his team with those of Owl Rock, which is one of the largest players in the alternative asset management space. On one side, Wisen, a former executive at Textron, and his team began thinking about the possibility of bringing commercial finance together with institutional investing.
“I had a strategy around marrying all the institutional investor capital that was going into direct lending and combining that institutional capital to commercial finance,” Wisen says. “I felt that if I found an investor with a long-term vision and a compatible credit culture which focused on long-term returns, we could bring something from the ground up that would enable profitable growth, rather than moving forward with an acquisition.”
At the same time Wisen and his team were formulating this idea, Owl Rock was looking to diversify and gain a stronger foothold into the commercial finance and asset-based lending space.
Wisen and his team’s approach and Owl Rock’s strategic ambition formed the foundation for a successful partnership. Wingspire launched in November of 2019 when many lenders were beginning to position themselves for the late stages of a credit cycle.
“Wingspire was conceived as a late-cycle business. We knew that should the credit cycle turn, we would be in a strong position as an asset-based lender,” Wisen says. “You don’t want to be building this in the middle of a maelstrom. You want to already have built your structure and be ready.”
Wingspire’s launch was a success and, perhaps unintentionally, headline-grabbing. That’s what happens when an industry veteran like Wisen teams up with a business such as Owl Rock to create a new company. Additionally, the company’s hire of John Rosin as president and chief operating officer provided even more momentum, as his background with Foothill Capital and MidCap Financial lent further credibility to the business.
“[David] and I met when he was putting the platform together,” Rosin says. “I have a history of building ABL and ABL structured platforms. I helped do it for Foothill and for Midcap, and it was right in my sweet spot.”
However, after its launch, Wingspire went quiet, at least from a public-facing perspective. It stood as a new and important player but one that many wanted to know more about. This was an intentional strategy from Wingspire, which wanted to accelerate business activity before announcing itself more fully to the ABL world.
“We wanted to enter into business and show prospective clients what we can do. We wanted to let our actions speak for themselves,” Wisen says. “However, because of the reputation of our teammates, the resonance of our messaging and delivery, and the quality of Owl Rock, we were getting calls from the beginning.”
In addition to winning deals, Wingspire also wanted to make some personnel moves, specifically aiming to add a chief credit officer, which is “one of the first things we did,” according to Wisen. That’s how Ken Wendler, former deputy chief credit officer of CIT and chief credit officer of CIT Corporate Finance, entered the fold. Ultimately, Wendler became a member of Wingspire’s leadership team along with Wisen and Rosin.
No Egos Allowed
Having talented and respected leaders like Wisen, Rosin and Wendler, along with other executives on the roster, is important, but not if pride or too much red tape gets in the way. Wingspire was built to avoid these roadblocks and Wisen, Rosin and Wendler each work hard to ensure that they are open-minded at a leadership level. Wingspire attempts to bridge potential inefficiencies by maintaining a “flat structure.”
“When we started, before there was even the name Wingspire, one of the first things we talked about was creating a positive company culture. We wanted a flat work structure and the ability to engage in collective decision-making so that individuals could disagree and discuss ideas freely,” Wisen says, noting that such a makeup has helped Wingspire remain nimble and responsive in the current environment. “I think it would have been much harder if we decided to have a hierarchical structure. What helped us was the very nature of what we were trying to build.”
The level of respect and coordination at the top is something Wisen, Rosin and Wendler want to be felt throughout the company. Such a desire is built on promoting effective and honest communication and “doing the right thing.”
“We do what we say, and we say what we do. It is important that we really mean that,” Wendler says.
It helps that Wisen, Rosin and Wendler have cultivated admiration throughout the industry, which helps enhance their ability to build teams with strong relationships.
“When someone we’ve been recruiting is considering joining our team, they know us already,” Rosin says. “They know what we’re about and in many cases, they want to come on board because of our personal relationship that we already have.”
Ultimately, what Wingspire wants to do is win deals and provide the best financing options it can.
“We’ve all worked at a job where the leadership has lost sight of why they are in business,” Wisen says. “We’re in business to provide solutions to middle market companies. When individuals lose sight of that and are thinking about themselves, that’s the minute the team loses and shouldn’t be in business anymore.”
Go Big or Go Home
Another distinguishing feature for Wingspire is the company behind it: Owl Rock. Wisen notes that Wingspire operates entirely independently, crafting its own credit authority and operating budget. However, as a portfolio company of Owl Rock, Wingspire benefits from several of its parent company’s strengths.
“They have a lot of dry powder and they raise capital intelligently,” Wisen says. “Their strategy for investors is quite compelling in offering consistent returns with exposure to various types of credit.”
Just because Wingspire can work on its own doesn’t mean opportunities to collaborate with Owl Rock never crop up.
“Although we operate independently, we benefit from the Owl Rock sponsorship” Wisen says. “We refer opportunities to each other, discuss market conditions and share best practices. This has especially been true during the COVID-19 pandemic, as certain private equity sponsor clients of Owl Rock sought Wingspire’s advice on ABL solutions for their portfolio companies.”
Having Owl Rock as a sponsor when Wingspire launched also helped with visibility and, more importantly, credibility, according to Wisen. Beyond lending credibility, Owl Rock is interested in the scaling potential of Wingspire.
“We have the capacity to grow,” Wisen says. “Owl Rock thinks big and they are interested in commercial finance through Wingspire because of our capacity to evolve.”
Hitting Their Stride
Wingspire is slowly approaching the one-year anniversary of its launch. Since November 2019, the company has firmly established its role in the ABL industry as a senior secured finance provider, with revolving asset-based lines of credit secured by receivables and inventory as its primary product. Wingspire also has a firm transaction size window, looking at deals between $20 million and $200 million. However, despite these general guidelines, nothing is etched in stone.
“We have flexibility in how we structure,” Rosin says. “We don’t have to adhere to the way it has always been done. We have the opportunity to be innovative, creative and nimble.”
Wingspire started showing its creativity early on. In its first deal, Wingspire crafted a structure for a third-generation family-owned business split between a traditional working capital line and term loans secured by real estate and equipment. Wingspire can lend this way because of its expertise and its standing as an independent organization.
“We’re not burdened by regulators or by looking at assets and determining whether they’re criticized or classified assets,” Wendler says. “We pass our own tests around the borrowers in terms of are we getting the right return and are we providing a solution that works for borrowers. That to me is what’s fun about lending.”
Due to its recent launch, Wingspire also does not have to worry about the fallout from what Wisen calls “vintage transactions.”
“This is distinctive for us because we can focus nearly 100% of our time through the windshield and not through the rearview mirror,” Rosin says.
Such a focus will become increasingly necessary in the landscape created by the COVID-19 pandemic, which has resulted in a greater need for refinancing and sources of capital.
“The world has clearly changed and with that, deals have changed,” Wendler says. “We will continue to evolve to reflect the needs of the marketplace.”
When Wingspire launched, Wisen and company envisioned having a team of about 15 people at this point as well as a defined portfolio and established brand. For the most part, Wisen says the company has accomplished those goals, but continued growth remains at the top of his mind.
“We’re going to grow. We’re going to add people. We’re going to compete for loans and we’re going to win business, and then we’re going to diversify,” Wisen says. “And we’re going to do all that keeping an eye firmly trained on what’s going on in the world.”