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MidCap, Apollo launch new direct lender for middle-market businesses
New York, Feb. 2 – Apollo Capital Management, LP and MidCap Financial LLC announced a new direct lending venture aimed at providing senior secured loans to middle-market businesses.
The new company, MidCap FinCo Ltd., has been capitalized with more than $1.2 billion of equity, according to a news release.
It will operate across “a diverse range of industries and asset classes,” the release said.
MidCap FinCo will include the existing operations and assets of MidCap Financial LLC, a specialty finance company that makes senior secured direct loans in the health-care sector. Based in Bethesda, Md., it has more than $2 billion of assets and 75 employees.
Apollo’s existing direct origination capabilities will be available to MidCap FinCo through an investment management agreement with Apollo Capital Management. These include energy, financial sponsors, aircraft, financial services, mining and other industries and will, the announcement said, complement MidCap Financial LLC’s existing expertise.
MidCap will continue to focus on the direct origination of senior secured loans, including asset-based loans, revolving credit facilities and other senior secured facilities, while Apollo will continue to utilize other credit vehicles it manages primarily for the direct origination of subordinated and opportunistic credit.
The new equity came from MidCap’s largest existing investors along with new institutional investors. MidCap also entered into new financing facilities.
Howard Widra, co-founder and former chief executive officer of MidCap, has joined Apollo.
“As a result of secular shifts in the traditional lending market, we believe direct origination is one of the most compelling opportunities in credit today,” said Marc Rowan, co-founder of and senior managing director at Apollo, in a news release.
Apollo is a New York-based alternative investment manager.
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