An ABL lender and a turnaround professional walk into a bar. They decide to partner and form a new company. Waiting for the punchline? There isn’t one.
Burnley Capital, a newly launched ABL lender, is a partnership between ABL veteran Daniel O’Rourke and James Cullen, who, while not precisely a turnaround pro, serves as a consultant helping businesses get on the right track.
Thanks to the wonders of modern technology, the pair were able to set up their new company with O’Rourke in Boston and Cullen in Minneapolis. The company’s sponsor, Blackburn Investment Management, is also in Minneapolis. It’s a marriage that couldn’t have been made even 10 years ago.
“That’s so true,” O’Rourke agrees. “That’s exactly right. I mean even back when I first started, our capital was in Chicago, and we were in Boston. We were commuting to get their credit committees and eventually got to the point where we could create committees via video conference.”
O’Rourke remembers those days before the internet enabled borrowers and lenders to connect without leaving home. He has spent more than 20 years in the lending space, following what has become a familiar trajectory.
At the Mercy of Mergers
“I got my start with a portfolio company of Wells Fargo through its Foothill entity,” he recalls. O’Rourke stayed with Wells in Boston through 2001, before moving to LaSalle Bank, where he joined the business credit unit. He stayed with LaSalle until it merged with Bank of America. After the merger, he and several members of his group moved to National City Bank, which eventually merged with PNC.
“So, while I was at those institutions, we were running sort of asset-based groups, and I was moving along in my career from an underwriter role into a portfolio manager role into a senior credit officer role throughout all that time. We enjoyed a tremendous amount of success building the platforms, building the portfolio, hiring the team and so on,” he says.
When the financial crisis hit, he and part of his group joined a smaller bank called New Alliance in order to start a new asset-based lending platform.
“That was a great opportunity for us,” O’Rourke says.
But, in what was becoming a pattern among the continuing wave of industry mergers, New Alliance was acquired by First Niagara. O’Rourke went on to work for Harbinger and then moved into the oil industry, setting up different platforms. Along the way, he often found himself working with Cullen.
“I was really enjoying working with Jim Cullen on a lot of the different deals that we were doing,” says O’Rourke. “And Jim comes out of the corporate revitalization space. He’s going into companies and finding capital or finding them debt or looking for equity. Most of his engagements tend to be consultative, helping companies through a transition.”
Building a Connection
While they didn’t necessarily go into the proverbial bar, the two men connected. Although half the U.S. often separated them, they enjoyed working together and believed they had complimentary skillsets.
“The deals that we worked on together had great outcomes in every single case,” says O’Rourke. “We realized that it was our joint effort that enabled us to help these companies through whatever transition they were going through.”
On their common projects, O’Rourke would provide the capital, and Cullen would guide the companies through whatever challenges they were facing. Eventually, they had that light bulb moment and realized that the best solution for both was to team up.
“We realized it would be great if we actually combined forces and launched a platform that enabled us to be very competitive for our borrowers and brought what I can do and what he could do together to a single platform,” says O’Rourke.
Finding a Sponsor
They met at the offices of Blackburn Investment Management in Minneapolis, a family office led by T.J. McMillian. That, too, seemed fortuitous.
“He (T. J.) had worked for Andrea Petro at Wells Fargo in their lender finance group. He had great exposure to the different platforms that are out there. So, we thought that made a lot of sense because T.J. comes into it with a desire to build an ABL portfolio on a platform from a capital side. And he’s got access to the capital markets and the lending background,” O’Rourke explains.
So Burnley was able to launch with Blackburn as its sponsor, O’Rourke negotiating the capital and Cullen providing the expertise to help their clients get off on the right foot. The deals starting coming from the start.
“The market is continuously sending us deals,” says O’Rourke. “Companies are looking for something that they just can’t quite get from their existing lender, and in two or three cases, our deal was pulled together because we offered a sort of one-stop solution to the company. And, you know, it’s quite competitive. There are a lot of other players out there. So, the biggest differentiation factor for us is that we know all the asset classes that are out there.”
Founding the company and being able to partner with Cullen and follow a different sort of path drives O’Rourke.
“I guess I live vicariously through the borrowers,” he says. “My passion is actually really digging as deeply as I can into every single deal and trying to understand what a company’s goals are and what companies see as their greatest attributes. The greatest challenge is in figuring out ways to help them both. That’s where Jim’s expertise comes into play.”
He points out that for many companies, a lender is “really just a checkbook.” But O’Rourke’s goal for Burnley is to bring more than money to the table.
Looking for Complexity
Bringing Cullen into ABL transactions is one way that Burley offers something beyond straightforward lending. In a recent deal, O’Rourke noted, the Burnley team discovered that the company was not using an effective platform to manage its inventory. Instead of just closing the loan and calling it a day, Burnley offered suggestions of alternate platforms that could help the company in its overall management. That, O’Rourke points out, is the added value Burnley offers.
Passive is the last word to describe the Burnley team. O’Rourke says they look for deals with complexity or companies that have been turned down by other lenders and have no place else to turn.
“We are out there looking for loans where a complicated deal is involved or it’s got some level of complexity Something that one of our peers sees as below their radar. That works really well for us. It’s something that we don’t mind digging our teeth into to try to create a solution,” says O’Rourke. •