Minnesota bank launches debt arm

Bell State Bank & Trust is expanding into private debt financing for the lower mid-market.

Minnesota-based Bell State Bank & Trust has launched Bell Capital Finance, a private debt financing operation headed by former Wells Fargo and PrivateBank executives.

Bell Capital Finance will focus on the lower mid-market, facilitating cash flow to opportunities with upper Midwest sponsors. The company bills itself as a specialised debt provider supporting local private equity funds in their buyout activities. Bell Capital Finance will target five to 10 transactions per year, Michael Mahoney, managing director at Bell Capital Finance, told Private Equity International.

“We are a division of the bank that will be using bank capital as a senior debt provider for companies and private funds in the upper Midwest region,” he said.  “We will also consider non-sponsored deals, but will likely take a different underwriting approach. We are looking at companies or funds doing business in the region. We aren’t going to partner with someone on a deal in Boston, for example, because that doesn’t make sense for us.”

Prior to his role with Bell Capital, Mahoney worked for Wells Fargo and debt provider Medallion Capital.

Formerly based in North Dakota, Bell State bought Minnesota based Bell Mortgage in 2010, adding to an already aggressive growth strategy focused on the upper Midwest. The bank now manages close to $3 billion in primarily mortgage assets.