Half of ArrowMark’s direct lending IC departs firm – exclusive

Neither departed employee indicated a rationale for their exit or future plans.

ArrowMark Partners has lost managing directors and portfolio managers Michael Novoseller and Vipul Shah, both of whom left the firm on Thursday 1 March, according to emails from the men.

Novoseller and Shah sat on the Denver-based firm’s direct lending investment committee, comprising two of the group’s four members, according to the firm’s website. Sanjai Bhonsle and Karen Reidy are the two other members; both are partners and portfolio managers at the firm, which invests in myriad strategies including direct lending.

Neither of the departed men, who could not be reached for comment, gave reasons for their departure in the emails, which appear to have gone out to a wide array of colleagues, or any indication of future plans. Both Novoseller and Shah still appear on the firm’s website.

The departures of Novoseller and Shah were “amicable”, the firm said in an email.

“We remain committed to the direct lending asset class and will be opportunistic in our approach, continuing to invest firm capital,” the firm continued, noting it has turned away capital commitments given the current market conditions.

Prior to joining ArrowMark, Novoseller and Shah both worked at Brightwood Capital, where they oversaw the firm’s SBIC funds, vehicles that are licensed and regulated by the US Small Business Administration. Before Brightwood, Novoseller worked at Stone Tower Capital, which Apollo Global Management acquired in April 2012, while Shah founded SVT Capital, a technology-focused mid-market private equity firm.

ArrowMark lends to companies, both those with and without a private equity sponsor, with $5 million-$50 million of EBITDA.  Its investments include secured loans, mezzanine loans and equity; while its deals are structured as standalone debt or growth equity, debt plus equity co-investments and one-stop financings for independent sponsors. The firm was formerly called Arrowpoint Partners but changed its name in March 2017 as part of resolving a “longstanding trademark infringement dispute”.

Editor’s note: The investment committee oversees just direct lending, not opportunistic credit as well.