Metric Capital Partners LLP ('Metric Capital') is a new fund manager providing debt-capital solutions to European mid-cap companies.
The business has been formed to respond to the ongoing dislocation in the credit supply to medium-sized enterprises throughout Europe.
John Connolly, who will step down from his roles as Global Chairman and UK Chief Executive Officer of Deloitte on 31 May 2011, will be the Chairman of Metric Capital and the business will be led by:
John Sinik - Managing Partner; former Global Head of Corporate Credit at UBS and Managing Director at TowerBrook Capital Partners
Peter Cornell - Partner and Head of Investor Relations; former CEO of Clifford Chance and former Managing Director at Terra Firma
Giovanni Miele - Partner and Head of Origination; formerly at UBS and Barclays Capital
David Scheurl - Principal; formerly at Deutsche Bank and MatlinPatterson
Ilkka Rantanen - Principal; formerly at UBS and Amanda Capital
John Sinik said: 'The corporate credit markets are currently characterised by a material discrepancy in the supply to large cap borrowers versus mid cap companies. Large corporate borrowers can access both the high yield and the syndicated loan markets, both of which are presently robust. In contrast, mid-cap companies, which have historically relied on commercial banks for credit, face a current and ongoing disruption in supply.
'Increasing regulatory pressures and capital requirements have resulted in diminished appetite for banks to maintain balance sheet exposure to illiquid mid-cap corporate loans. In addition, the banks themselves have multiple trillions of debt maturing in the next few years and must compete with sovereign governments for funding.
'From a demand perspective, billions of Euros of corporate loans are coming due for repayment over the next years, creating further market pressure. In response to these market dynamics, Metric Capital has been specifically structured to address the non-syndicated, non-publicly traded end of the corporate credit market'.
John Connolly, comments: 'Economies across Europe are exhibiting rather tepid recovery as we emerge from the recession. Sustainable recovery will be driven, in part, by mid-market companies having access to the necessary capital to grow their businesses. We are excited about the prospects for Metric Capital serving as a new breed of lender to fulfil this critical market need'.
Metric Capital will provide capital solutions to companies with an enterprise value of between EUR 50m and 500m. These will include buyouts, growth and acquisition capital, liquidity facilities and rescue financing. Metric Capital will also build its asset base through buying existing loans where lenders are fatigued, forced sellers or simply looking to downsize exposure to particular borrowers.
The firm is principally focused on providing senior secured loans to its corporate clients, with the flexibility to take positions throughout the borrower’s capital structure.
Based on initial soundings, the management team believes that the business will be highly attractive to a wide range of parties. John Sinik also comments that 'investors are supportive of our deep due diligence approach to providing credit - in contrast to a trading mentality. The assembled team brings to the table a highly complementary set of skills, relationships and experiences, having collectively committed over EUR 100 billion in capital to European companies throughout their careers. The leadership positions are filled by individuals who have run multi-billion Euro companies and divisions, with world-class governance experience. Finally, the floating rate nature of the assets serves as an inflation hedge, which is of increasing concern to the investment community. We are confident that our strategy will deliver attractive long term returns to our investors'.
The business has already filed an application with the UK Financial Services Authority in order to receive the appropriate authorization.