Providence hires former Deutsche exec for debt fund

Thomas Gahan will take over the media and telecom-focused firm’s $1bn debt investment programme, which is exploring investment opportunities in the stagnant credit markets.

Providence Equity Partners, which specialises in media and entertainment companies, has hired Thomas Gahan as president of the company’s recently established debt investment programme.

Gahan was the securities chief executive for Deutsche Bank, where he helped expand the company’s mergers and acquisitions, equity, and corporate advisory operations. He also spent 11 years with Merrill Lynch, most recently overseeing its global activities in the high-yield, emerging market and distressed areas.

Providence, Rhode Island-based Providence has reportedly raised a $1 billion (€681 million) debt fund, which was higher than the firm's initial $700 million target. The firm’s Capital Markets Group invests in the debt of worldwide media, entertainment, communications, and information companies. Providence manages about $22 billion in equity commitments and has invested in more than 100 companies including Casema, Hulu, Open Solutions, and Warner Music Group.

Providence, headed by CEO Jonathan M. Nelson, was assisted on the launch of the new fund by its unit Newport Global Advisors, a distressed debt investment firm which raised a $500 million debt fund last year.

The fund allows Providence to buy back debt associated with its own deals, including the $51 billion buyout of Canadian telecom firm BCE. The company’s most recent buyout fund closed in February 2007 on $12 billion, with investors including the California Public Employees’ Retirement System and Teachers’ Private Capital.

A number of other firms have launched debt funds in response to the ongoing instability in the credit markets. Summit Partners of Boston is reportedly raising a $750 million debt fund and Sankaty Advisors, the credit affiliate of Bain Capital, is holding a $3.5 billion closing on it latest debt fund in August.