BC Partners is set to launch its first business development company, an entity that will make investments in companies with between $10 million-$100 million in EBITDA with a focus on the lower end of that range.
The New York-based credit arm of the London-based private equity firm submitted the requisite registration statement for BC Partners Lending Corporation (BCP Lending) with the Securities and Exchange Commission on Thursday, according to the regulatory documents. The firm must still file a notice of election that the firm intends to have the vehicle regulated as a BDC.
The vehicle will be externally managed by BC Partners Advisors, which will charge a 15 percent incentive fee over a 6 percent hurdle and a 1 percent management fee on gross assets. It will invest in senior secured debt, both first lien and second lien, along with unitranche loans, unsecured debt, equity and structured products.
BCP Lending will shy away from the upper end of its EBITDA range because it is more competitive and lacks the “better structures, stronger covenant packages and greater management and due diligence access” that are more commonplace among smaller companies.
The BDC plans to leverage BC’s private equity platform in developing a dealflow pipeline. In addition, it plans to provide managerial assistance by tapping the private equity business’s operations team along with the knowledge base of its senior advisors and network of chief executives.
BCP Lending has yet to start investing and hasn’t held an initial close, but the documents note that its plans to do so “as soon as practicable”. The firm does not currently intend to publicly list its BDC on an exchange, according to the registration statement.
Ted Goldthorpe, managing partner of BC’s credit operations, is the chief executive and president of the new vehicle. Previously, he was president at Apollo Global Management’s BDC, Apollo Investment Corporation. Goldthorpe is currently the only member listed on BCP Lending’s board of directors, which plans to have five members.
BC managing partner and finance director Graeme Dell is the BDC’s secretary, chief financial officer, at BCP Lending. while the BC’s chief compliance officer, Andrew Devine, holds the same title at the BDC.
Investment decisions will be made by the firm’s five-person investment committee, on which both Goldthorpe and Dell will sit on. The three additional members are Matthias Ederer and Henry Wang, both partners in the BC’s credit group, and Raymond Svider, a managing partner in BC’s private equity business.
The firm has also filed an exemptive relief application looking to co-invest its BDC alongside its debut opportunistic credit vehicle, BCP Special Opportunities Fund I, which is seeking $200 million.
BC is one of the newer kids on the private credit block, having launched its platform in February 2017 when it announced the hiring of Goldthorpe, Ederer and Wang, who had worked together at Goldman Sachs.