Investment firm Phoenix Merchant Partners closed its first transaction, providing financing to Gryphon, a company involved in quota share non-catastrophic property and casualty reinsurance services, marking the official launch of Phoenix’s private credit and lending solutions platform.
The financing provides for the capitalization of Gryphon’s balance sheet and the future growth of its reinsurance program. The transaction’s structure includes a combination of two financial instruments: a delayed draw senior facility, represented by a contingent capital note, and the issuance of preference shares. The terms include the ability for Phoenix and related parties to provide additional growth financing over the course of the next several months.
“We see significant unmet financing needs among unsponsored businesses in the middle market and believe our creativity, prudent approach to structure and focus on process uniquely position us to identify and execute on that differentiated opportunity set,” Art Mbanefo, founder, CEO and CIO of Phoenix Merchant Partners, said. “We are excited to launch this part of our platform through our relationship with Gryphon, which provides testament to our ability to pivot and offer bespoke financing solutions that match company and industry dynamics.”
Clifford Chance and Sidley Austin served as legal counsel for Phoenix on the transaction, while Houlihan Lokey is now being engaged to serve as financial advisor on the next stages of the deal.
“Art and the team at Phoenix have established well-deserved reputations as creative capital providers at a number of companies and across multiple geographies; this is not the first time we see them bring new innovations to the insurance market,” Arik Rashkes, Managing director and co-head of Houlihan Lokey’s financial services group, said. “We believe that this could be the first of many innovative financings by the Phoenix Merchant Partners platform that can help redefine how companies approach financing alternatives.”
Phoenix Merchant Partners also announced the addition of several senior investment professionals. Adrian Macedo joined the company as managing director and head of investments from ORIX USA, where he most recently worked with Mbanefo in a similar role. In addition, Julia Henderson will join Phoenix as managing director of insurance solutions on Feb. 1. She previously served as president and head of portfolio management at Stable Corporation, where she remains on the board of directors.
The firm also added Benjamin Weston to its advisory board. Weston recently served as global head of alternative investments and chief investment officer of the alternatives investments department at Abu Dhabi Investment Authority.
“Our people will always be our greatest asset, and the addition of these incredibly talented and highly-regarded professionals provide further testament to the opportunity we see for our platform,” Mbanefo said. “In founding Phoenix, I set out to build a truly institutional business, and we have established an exceptional foundation of insight and experience from which to grow. We look forward to continuing to strategically expand our team and advisory board as we work with high quality companies and investment partners.”