Guggenheim 2016 direct lending total surpasses 2015

The firm said they will endure any regulatory or market changes in 2017.

Guggenheim Investments direct lending business invested more than $4.7 billion in private credit in 2016, the company said on Tuesday (31 January).

The New York-based mid-market lender’s transactions tilted toward large syndicated deals with anchor orders, due to the market disruptions in early 2016, Joe McCurdy, managing director and head of originations at Guggenheim, said in a statement.

The firm also provided first lien, second lien, unitranche, and other structures across the US and Europe, with a mix of direct, club and anchor deals, the company said. Last year’s total deal volume surpasses the $3.8 billion that the firm issued in 2015.

McCurdy told Private Debt Investor that the firm may do as much or more direct lending this year, but “that depends on what opportunities arise”. Though the firm is seeing more activity at the start of this year than last year, that “is more market driven than anything”, he added. 

Guggenheim has been active in the direct lending mid-market for the last 15 years.  “The transactions we do are bigger now, with more capital raised,” McCurdy said. “And especially the last handful of years, we’ve been more and more active.”

Last year, Guggenheim provided $339.75 million to an event management platform in June, which consisted of a $140 million first lien loan and a $199.75 million second lien loan. The firm also lent a $250 million unitranche to support a commercial mortgage company’s acquisition in September and a $210 million first lien loan to an auto industry risk management software provider in March.

This year could see President Donald Trump and a Republican-controlled Congress could rollback the Dodd-Frank Act or other financial regulations on the large banks, potentially bringing these players back into the mid-market credit space.

But such a scenario does not concern the direct lending team, the firm told PDI.

David Richman, who works on the direct lending team, said  Guggenheim is adept at working in the competitive mid-market environment. “Borrowers appreciate the solutions that we can provide, which is unlikely to change as competitors enter or leave the market,” he said.

McCurdy added: “We have been doing this for over 15 years, and it wasn’t that long ago that the banks had less regulatory burden, and yet we competed with them – and partnered with them – in the mid-market.”

Guggenheim Investments is the global asset management and investment advisory platform of Guggenheim Partners. The division has $204 billion in assets across fixed- income, equity, and alternative strategies, according to the statement.