MidCap FinCo and Apollo Capital Management have launched a direct origination platform for MidCap Financial focused on direct lending opportunities in the senior secured credit market.
MidCap Financial includes the existing operations and assets of MidCap Financial LLC (MidCap), a specialty finance firm focused on senior secured direct origination in the healthcare sector with more than USD2 billion of assets and a seasoned team of more than 75 employees headquartered in Bethesda, MD, complete with fully scalable asset management and back office infrastructure, systems and processes capable of full lender services.
Through an investment management agreement between Apollo and MidCap Financial, Apollo’s existing direct origination capabilities in energy, financial sponsors, aircraft, financial services, mining and other industries, will complement MidCap’s existing senior secured origination capabilities. It is expected that MidCap will continue to focus on the direct origination of senior secured loans, including asset-based loans, revolving credit facilities, and other senior secured facilities, and that Apollo will continue to utilize other credit vehicles it manages primarily for the direct origination of subordinated and opportunistic credit as appropriate.
In connection with its launch, MidCap Financial has been capitalised with more than USD1.2 billion of equity, including equity from its largest existing investors and commitments from a new group of leading global, blue-chip institutional investors. In addition to this capital, MidCap Financial has entered into new financing facilities and expanded a wide variety of its existing facilities to support the platform’s anticipated growth and scale.
“We are extremely excited by the opportunity to establish a leading direct origination platform in the senior secured credit market,” says Steve Curwin, CEO of MidCap FinCo Limited’s operating subsidiary and Co-Founder of MidCap. “We believe MidCap Financial is very well-positioned for success through the unique and powerful combination of MidCap’s existing senior secured direct origination business, coupled with Apollo’s leading global alternative credit and direct origination capabilities and integrated investment platform. In addition, the significant equity commitment we received from some of the world’s most prominent institutional investors should enable us to rapidly scale our existing activities and access new asset classes.”
“As a result of secular shifts in the traditional lending market, we believe direct origination is one of the most compelling opportunities in credit today,” says Marc Rowan, Co-Founder and Senior Managing Director of Apollo. “MidCap Financial is well suited to capitalise on this significant opportunity in the senior secured market given its outstanding team, deep industry expertise, robust infrastructure and innovative and flexible permanent capital structure. In addition, we are pleased that Howard Widra, the Co-Founder and former CEO of MidCap, has joined Apollo to further align the direct origination capabilities of MidCap Financial and Apollo. We believe MidCap Financial’s focus on senior secured lending, together with Apollo Investment Corp.’s existing strategy, will enable Apollo to be a broad solutions provider across the credit origination spectrum.”
