If there are two things that run in Robert Love’s blood, they are New York and asset-based lending.
The 42-year-old head of the newly launched ABL shop Amalgamated Business Credit (ABC) grew up in Astoria Queens, married his childhood sweetheart, is a dedicated Rangers fan, and has hung out with the same ten friends since high school.
Love got his first taste of commercial finance through his uncle Emmanuel Darmanin — who ran CIT Business Credit in the mid-1990s — and has spent the better part of two decades building the kind of network that enabled him to pick up the phone one day with an idea to launch a new middle-market lending firm. Two months later, he was selected to open up shop at Amalgamated Bank.
Love, who has worked at GE Commercial Finance, CIT Group and, most recently, at Royal Bank of Scotland, has originated more than $2 billion in ABL transactions over his storied career.
“I’ve made a career out of doing non-traditional ABL loans where I think out of the box,” he says. “I know a lot of people say that, but if you look at my track record of the deals that I’ve done; I’ve done things that require a little more thought, but at the end of the day are true ABL.”
After graduating from New York University with a Bachelors’ degree in Economics in 1990, Love went to work with Bank of New York Commercial Corp. and Dime Commercial Corp., before going on to GE Commercial Finance’s Corporate Lending Group in New York. At GE, he served as senior vice president of origination where he was responsible for originating and closing asset-based and cash-flow transactions in the Northeast.
During his tenure there he won the GE Imagine Award for structuring a $200 million revolving credit facility, and in 2002, he earned the GE Six Sigma Greenbelt Certification for a project to improve the conversion rate of signed proposals to closed transactions.
In 2006, after seven years with GE, he left to pursue a job at CIT, where he worked as a senior vice president and team leader of origination for CIT Commercial & Industrial. In 2009, he joined RBS where he spent the next year serving as senior vice president of origination.
Yet despite such measurable success, for Love, there was always something missing. “Running my own group and calling the shots is something that I’ve wanted to do from the first day I walked in to this business,” he says. “Over the years I have seen the way different people did different things and I tried to take a little from each one, but I always had my own opinions on the way things should be run.”
For years, Love says, he had sketched out business models in his head, preparing for the day they could be put to use. That time came in the spring of 2010, when he started putting feelers on the street for banks and other lenders that might be looking to get into ABL. “I started to look at different opportunities to do a startup someplace,” he recalls. “I started calling on people and doing my research in terms of who does asset-based lending and who doesn’t and where there might be a fit for me in this kind of role.”
One day, he says, he was perusing the Amalgamated website when he noticed that while the bank had a C&I middle-market lending group and a cash-flow equity sponsor group, it was missing an asset-based lending option. “So I picked up the phone and [then] sent an e-mail to Derrick Cephas, Amalgamated’s chief executive officer,” Love recalls.
In a case of serendipity, on the other end of that e-mail, Cephas was himself mulling over an idea he’d had to form an ABL unit. He thanked Love for the call and invited him in for a meeting. And the rest, as they say, is history.
“When I walked into the room to interview with Amalgamated I interviewed with something like eight people, so if I hadn’t done my homework over those past couple years in terms of how I would actually like to run something, I think I would have fallen short on a lot of the questions,” he reflects.
Considering his options, Cephas decided that the time was right for an Amalgamated ABL unit, and Love was just the man to bring it to fruition. He wasted little time moving forward with the plan: Love says from the time of his first meeting with Cephas, in June 2010, to his joining the bank, barely two months passed. Amalgamated Business Credit was officially launched not long after that, on Sept 7, 2010, with Love at the helm as executive vice president and director.
In comments to the press, Cephas called the launch, “the latest step in the program aimed at filling out our suite of commercial lending capabilities.”
“This new group complements Amalgamated Capital … and our Middle Market and Commercial Real Estate Finance divisions. With this array of lending and financing services, we are now able to serve a full range of financing needs for middle-market companies,” Cephas said.
The new group has a national platform for financing middle-market companies with revenues of $50 million to $200 million. Love says this demographic represents an underserved constituency, almost an untapped market in the current economic climate. “If you go back to, say, the early 1990s, there were players in this market, and then consolidation happened and you went from all these lenders down to a select few,” says Love.
He adds that the lenders that remained in the market quickly realized that it took just as much work to do a $10 million deal as it does a $30 million one.
“It doesn’t take a genius to figure out that if they could go after a $30 million or $40 million deal as easily as a $10 million deal, then maybe their time is better served on the $30 million or $40 million transaction because they know this is going to take just as much work and they are going to be able to book more outstandings on their portfolio,” he says.
Love says Amalgamated will focus on this underserved segment, primarily inking deals ranging from $3.5 million to $15 million. What’s more he adds, many of the current middle-market players tend to be regional banks, which are happy to remain within a clearly defined footprint.
As a generalist with a national scope, Amalgamated will serve an array of industries across a variety of geographies. With a foundation in place, his optimism is palpable. “There are a lot of companies in that whole $20 million to $200 million revenue range that are returning to profitability in 2010,” he says. “They got beat up a little in the downturn and they’re starting to do better and there aren’t a lot of lenders in my space right now.”
So far Amalgamated has been involved in a number of participations, but had to postpone booking its own business until the unit’s structure was in place. Love says his first job was to create a policy and procedure manual, a task that proved to be more difficult than he’d expected.
“I thought that I was going to come in here and I was going to start writing deals and booking deals and I knew how I wanted to structure a group, but I never actually sat down and did a policy and procedure manual,” Love says. “The first day I walked in here they said, ‘Bob you have to put together a policy and procedure manual,’ and so the sales generation kind of came to a screeching halt. I had to put together a 50-100 page document on every little detail about how a loan is processed through this bank and what your credit guidelines are; that took a good month I’d say. That was kind of unexpected …but, in the end, it has been very beneficial.”
He received the final approval on the manual from Amalgamated’s board the day we spoke to him. “Now we are good to go,” Love says.
Over the next six months, Love says the company will begin boosting its sales force, which currently totals three (an operations manager brings to four the total ABC staff) and building its portfolio. Love says the company is looking to put on $100 million in outstandings next year. “Right now, our primary focus is putting assets on; we’re looking at a lot of deals, a lot of structures, we’re buying a lot of paper,” he says, giving credit to a handful of other lenders that have been feeding the company deals.
“All the other lenders who are doing $20 million and over have been really great to us; it’s almost like they were looking people to send their deals to,” he says. “Where I get most of my deal flow right now is from my friends basically, which are just saying, ‘Hey I can’t do this deal, it’s too small.”
Additionally, he says middle-market firms like CIT, PNC, RBS, Wells Fargo and GE have been showing ABC pieces of their deals, which he calls “quick hits.”
Love says he is now on the lookout for tested sales executives who are eager to be part of something that is flexible and growing. Love says he’s looking to add between four to six people, building ABC into a group of ten by the end of 2011.
“I think people want to work in a place where they can do more than one thing,” he says. “They don’t want to work in a place where [they are] pigeonholed into one kind of deal their whole lives. In order for employees to be well rounded they need to see all kinds of deals. And that’s something Amalgamated Business Credit can offer.”
Christopher Moraff is a former associate editor of ABF Journal.