Daily News: June 12, 2014

Walter Owens to Lead New Middle Market Lending Venture

Varagon Capital Partners announced its formation as an asset manager focused on direct lending to middle market companies. Varagon is an independent firm, backed by AIG, and certain partners and affiliates of Oak Hill Capital Management (Oak Hill), and launches with an initial $1.5 billion investment commitment from AIG.

Varagon is led by CEO, Walter Owens, an experienced middle market finance executive who has held leadership positions at GE Capital, CIT Group, and TD Bank. “Varagon’s versatile product suite creates a ‘one-stop’ financing solution for borrowers,” said Owens. “Varagon’s investors have a broad appetite for attractive risk-adjusted returns, allowing Varagon to offer competitive financing solutions up and down the capital structure.”

For borrowers, Varagon’s model is relationship-based and industry-focused, built around a deep understanding of its customers’ businesses and financing needs. A broad investment mandate allows Varagon to offer competitive first-lien, unitranche and second-lien loans, as well as mezzanine financing, to companies with $10 million to $75 million of EBITDA. Varagon targets leveraged finance opportunities of up to $350 million and has a typical hold size of $20 million to $100 million.

Denis Nayden, a managing partner of Oak Hill and former chairman and CEO of GE Capital, serves as the chairman of Varagon’s Board of Directors. Varagon’s board also includes independent directors with significant industry expertise. Michael Gaudino, former CEO of GE Corporate Financial Services, and Morris W. Offit, chairman of Offit Capital, both serve on Varagon’s board of directors.

“Varagon developed from our belief that there is an opportunity to better serve both borrowers and investors in the middle market,” said Denis Nayden. “Varagon offers investors a superior means to invest in middle market credit, providing highly attractive risk-adjusted returns through tailored, transparent investment solutions.”