Kayne Anderson Capital Advisors, having recently hired Jim Hunt as chief executive of mid-market credit, is on the prowl for expansion.
Hunt, who previously founded and led THL Credit, told PDI he’d be interested in expanding into Europe if he can find a good credit team there that Kayne Anderson can hire.
The firm currently manages $1.7 billion in mid-market credit and those assets are entirely invested in the US. Kayne Anderson credit executives reckon that entering the European market would be best achieved with a platform that has good exposure in the major European cities, so they’d be interested in acquiring a group or lifting out a team that has that kind of platform.
Hunt is also interested in partnering with banks on deals. Many alternative lenders frequently partner with banks on a one-off basis, though Hunt would be interested in formalizing a partnership where Kayne Anderson and a bank could continuously work together on loans. This could involve the bank arranging a revolving credit facility, partnering on an asset-based loan or assuming the senior-most part of a deal.
Banks have been decreasing their lending activities lately to comply with regulation, though many still want to stay in the game to some extent. Hunt thinks that alternative lenders can actually help banks comply with their restrictions, while allowing them to maintain a foothold in the space.
Ares Management recently formed such a partnership on UK loans with Barclays. Cerberus Business Finance is in the process of raising money for a fund in partnership with PNC Bank, while TPG Special Situations Partners formed a commercial finance JV with CIT bank last year.
Hunt is also looking to build up a tradable credit capability at Kayne Anderson. THL Credit formed its tradable credit group in Chicago by acquiring a McDonnell Investments in 2012. Most other large mid-market lenders in the US have a tradable credit business where they handle collateralized loan obligations (CLOs) and broadly syndicated loans.