NewStar Financial has been very active in expanding it middle market sponsor coverage team. The firm just announced that it has promoted Pat McAuliffe to lead its leveraged finance business and two other senior bankers, Eric Herr and Matt Colucci, have joined its leveraged finance business as managing directors to expand originations. In April, NewStar also hired Wes Frangul as a managing director in its Chicago office.
After serving as co-head of Leveraged Finance in 2012, Mr. McAuliffe will now lead NewStar’s efforts to deepen relationships with its core clients, while also broadening its coverage of private equity firms with investment strategies focused on the middle market. Mr. Herr will open an office for NewStar in New York and Mr. Colucci will be based in the company’s Darien, CT office.
“Today’s announcement reflects the continued growth and expansion of our direct lending platforms focused on the middle markets,” said Tim Conway, NewStar’s CEO. “I am very excited to have banking veteran and proven manager, Pat McAuliffe, lead our Leveraged Finance business as we continue to grow this specialized lending platform. These changes, together with additional lending capacity from our new $300 million credit fund and $200 million institutional term debt financing, position us to continue expanding our client base, while also increasing our commitment to existing clients in this important market segment.”
NewStar’s leveraged finance group provides revolvers and term loans, stretch senior loans, and second lien loans to companies with $5 million to $30 million of EBITDA. Loan sizes range from $5 million to $150 million, with hold sizes of $5 million to $35 million and underwriting up to $100 million. Sectors of interest include business services; consumer products; environmental; general industrial manufacturing; healthcare; media; restaurants; retail; transportation; and value-added distribution.
Mr. McAuliffe has been with NewStar since 2005 and Co-head of its Leveraged Finance division since 2012. Prior to joining NewStar Financial in 2005, he was a Regional Executive at Bank of America responsible for a $2 billion portfolio consisting of 1,500 middle market customers throughout the Metro New York region. Prior to its sale to Bank of America, Mr. McAuliffe spent 20 years at FleetBoston Financial, serving most recently as President of Fleet’s metro New York region. Prior to that he was Executive Credit Officer for Fleet’s middle market commercial lending business and was Group Executive for several national specialized lending groups including Oil & Gas, Transportation/Auto, Specialty Finance, Sports Finance, Utilities, and Environmental Services.
“I am thrilled to have the opportunity to lead this business for NewStar and I am excited about our opportunity in the marketplace with this team,” said Mr. McAuliffe. “Opening a New York office and adding three respected bankers like Eric Herr, Matt Colucci and Wes Frangul clearly reinforce our commitment to expand in this attractive market segment. Although we are well established in these markets, we continue to emphasize the quality of our sponsor coverage as we enter the next phase of our development,” he added.
Mr. Herr joins NewStar as a managing director from The Carlyle Group where he was a Principal in the GMS Finance group. Prior to joining Carlyle, he was a Managing Director and founding member of Churchill Financial. Previous to that, Mr. Herr was with GE Antares where he was a Managing Director and a senior banker. Mr. Herr also served as SVP and Team Leader in Risk Management for GE Commercial Finance. He has more than 20 years of experience in leveraged finance and sponsor coverage including positions at Transamerica and Chrysler Capital.
Mr. Colucci joins NewStar as a managing director from Balance Point Capital Partners where he was a Partner managing a middle market mezzanine fund. Prior to that, he was a Managing Director and founding member of Patriot Capital Funding where he was member of the firm’s investment committee and led a six-person investment team. He has more than 16 years of leveraged finance experience including positions at GE Capital and Bayerische Landesbank.
Mr. Frangul joins NewStar from Arvon Advisors, a middle-market focused M&A advisory firm. Prior to that, he was a Managing Director at BMO Capital Markets where he was responsible for transaction origination across multiple product lines including senior debt, mezzanine and high-yield debt, public and private equity, mergers & acquisitions and derivatives. He has over 25 years of financial advisory experience and has completed more than $20 billion of transaction volume across various industries.
NewStar Financial (NASDAQ:NEWS) is a middle market commercial finance company. The company provides senior secured debt financing of $10 million to $150 million to mid-sized companies to fund working capital, growth strategies, acquisitions, recapitalization, and equipment purchases. NewStar is headquartered in Boston and has regional offices in Darien, CT; Atlanta; Chicago; Dallas; Los Angeles; Philadelphia; San Francisco; and Portland (www.newstarfin.com).
© 2013 PEPD • Private Equity’s Leading News Magazine • 6-7-13