MidCap Financial, in alliance with Apollo Global Management, started a non-exclusive strategic capital relationship with Lafayette Square, an impact investment platform founded by Damien Dwin that is working locally to create an inclusive U.S. economy. Through this new relationship, sourced through Apollo’s expanding opportunity initiative, MidCap Financial and Lafayette Square expect to collaborate on future opportunities that positively impact communities across the country.
In their first joint transaction, Lafayette Square and MidCap Financial Trust agreed to provide a senior secured facility to Zero Waste Recycling (ZWR), a recycling and non-hazardous waste processor, to support an employee-led buyout. The financing will help ZWR support long-term wealth creation for its employee base.
“Zero Waste has a terrific track record of growth and value creation, and we’re pleased to provide a capital solution that allows Zero Waste employees to significantly share in the future performance of the company,” Melissa Morrison, managing director at MidCap Financial, said. “What’s more, strong performance of the business is directly tied to improving environmental sustainability.”
“Zero Waste is an incredibly impactful company well-aligned with our mission to bring capital and services to historically neglected communities,” Don Baylor Jr., managing director of community impact at Lafayette Square, said. “We are thrilled that along with a loan to Zero Waste, the financing package will permit Zero Waste to provide its employees with access to no-cost loans and financial coaching from third party financial wellness platforms, especially during this time of financial stress. It is these types of solutions that we believe will create long-term, sustainable impact for families in every community and drives us toward our vision of an inclusive American economy.”
Formation of this strategic relationship demonstrates the build-buy-partner approach that Apollo and Midcap Financial take to extend asset origination capabilities and source deal flow. In 2021, as part of Apollo’s focus on expanding opportunity, the company launched a dedicated initiative to broaden and diversify the funnel of asset managers with whom Apollo transacts. The new relationship with Lafayette Square was sourced through Apollo’s expanding opportunity program.
“Apollo has a long-held strategy of investing in and alongside differentiated investment managers, and expanding opportunity is about making an intentional, programmatic effort to broaden our relationships and diversify the pipeline of opportunities we evaluate,” Reggie Love, senior advisor at Apollo, said. “Damien has a tremendous reputation and he’s assembled a talented, experienced team at Lafayette Square. We are excited for MidCap Financial to consider a wide array of impact-oriented financing opportunities and support Lafayette Square’s mission to confront critical societal challenges.”
Apollo’s efforts behind expanding opportunity include broadening the funnel for investments, talent and vendors through many dimensions of diversity, including race, gender and background. To support hiring efforts at Apollo and across its funds’ portfolio companies, Apollo, together with CareerBuilder, operates Apollo VetNet and Apollo HBCUNet to connect more military veterans and students and alumni from Historically Black Colleges and Universities (HBCUs) with open career opportunities across its network. And in June 2021, Apollo, together with Ares and Oaktree, launched AltFinance, a $90 million, 10-year initiative to build pathways for more HBCU students to pursue careers in alternative investment management.