Lower mid-market US lender partners with wealth manager

The agreement will give Leo Group clients access to a $55 million private debt portfolio managed by Lateral Investment Management. 

New Jersey-based wealth manager, The Leo Group, has teamed up with private lender Lateral Investment Management, to source credit opportunities.

The Leo Group, which has $1.3 billion in assets under management, works with family offices, institutions and endowments, managing their investments. The partnership brings Lateral on-board as the advisor on a private debt portfolio totalling $55 million. Kenneth Masters and Richard de Silva, principals at Lateral, will act as co-portfolio managers.

“Lateral delivers a high-yield private debt product which is differentiated in today’s low-rate environment. Lateral’s principals have a great track record of creating value for middle-market portfolio companies. We are excited to tap into their capabilities on behalf of our investors,” said Matthew Allain, Leo Group’s chief executive.

Lateral provides growth financing to small- and medium-sized owner-operated or family-owned businesses. Debt facilities are generally collateralized loans to profitable North American businesses with revenues of between $10 million and $100 million and require a significant short-term capital investment to pursue a well-defined growth opportunity.

Kenneth Masters is Lateral’s chief investment officer. He co-founded White Oak Global Advisors, a direct-lending firm based in San Francisco and has also worked in the credit unit of KKR originating direct loans. Richard de Silva, a managing partner at Lateral, has served as general partner of Highland Capital Partners, the Boston-based private investment firm.

“We believe private credit risk in the United States is priced at a significant premium over public debt with comparable risk. We address the very low end of the middle market, which includes more than 350,000 businesses and is massively underserved by both debt and growth equity firms,” said Masters.

Lateral is based in San Mateo in California and has invested over $1 billion in lower mid-market companies over the past 10 years.

The Leo Group, based in New Jersey, has offices in New York, Boston and Switzerland. It advises clients on wealth management, tax strategies, capital markets and asset management.