A new company backed by AIG and Oak Hill Capital Management has been formed today with the launch of Varagon Capital Partners, a direct lender to middle market companies. Varagon launches with an initial $1.5 billion investment commitment from AIG.
Varagon offers 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. Varagon is headquartered in New York (www.varagon.com).
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 Mr. 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.”
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 industry expertise such as Michael Gaudino, former CEO of GE Corporate Financial Services, and Morris 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 Mr. Nayden. “Varagon offers investors a superior means to invest in middle market credit, providing highly attractive risk-adjusted returns through tailored, transparent investment solutions.”
“We are excited about the opportunity to partner with Varagon,” said Brian Schreiber, Deputy Chief Investment Officer of AIG and a member of Varagon’s Board of Directors. “As a long-term investor, AIG is drawn to the strong fundamentals of the middle market opportunity. Varagon offers sophisticated investors clear, attractive, and flexible exposure to high quality, directly-originated assets with best-in-class risk management.”
American International Group – also known as AIG – is an American multinational insurance corporation with more than 88 million customers around the globe. The company operates through two segments: AIG Property Casualty and AIG Life and Retirement. AIG’s corporate headquarters are in New York, its British headquarters are in London, continental Europe operations are based in La Défense, Paris, and its Asian headquarters is in Hong Kong. AIG serves customers in more than 130 countries around the world and employs over 64,000 people in more than 90 countries (www.AIG.com).
Oak Hill Capital Partners has $8 billion of committed capital and invests in the following six sectors: basic industries; business and financial services; consumer, retail & distribution; healthcare; media & telecom; and technology. Over the past 25 years, the professionals at Oak Hill Capital Partners and its predecessors have invested in more than 70 private equity transactions. The firm is located in Stamford, CT (www.oakhillcapital.com).
2014 PEPD • Private Equity’s Leading News Magazine • 6-11-14