Vulcan Capital, the private investment group of Paul G Allen, and a group of investors led by LKCM Capital Group, LLC (LKCM), the alternative investment vehicle for Luther King Capital Management, have launched Ascentium Capital, a lender focused on the important but underserved market for small-balance commercial loans and leases in the United States.
Ascentium Capital will acquire a USD150 million portfolio of commercial loans and leases from Main Street Bank (Main Street), as well as a state of the art small business origination and servicing platform. Separately, Main Street has reached an agreement to sell its branches and deposits to Green Bank, NA. Following the completion of the sale of assets to Ascentium Capital and the branch/deposit sale, Main Street will liquidate and terminate its banking charter. Ascentium Capital does not intend to operate under a banking charter.
Ascentium Capital will be initially capitalised with USD75 million of equity and a USD250 million warehouse facility led by UBS Investment Bank. The company will also have access to an additional USD35 million of equity capital to fund future growth. Ascentium Capital will be headquartered in the Houston metropolitan area of Kingwood, Texas, and led by the existing Main Street senior management team, including Chairman Tom Depping. The company will originate loans and leases through a national sales staff that will work with equipment manufacturers, distributors and resellers, as well as vendors, franchisors and selected equipment lease brokers.
“We see a tremendous opportunity to meet the lending needs of small businesses. We believe Tom and his team are well positioned to capitalise on this opportunity given their outstanding long-term track record and proven commitment to high standards of integrity and customer service,” said Geoff McKay, a managing director of Vulcan Capital.
"In an environment of ongoing economic and regulatory uncertainty, it is important that lenders continue to find ways to meet the strong demand for small-balance commercial loans and leases," said Bryan King, managing partner of LKCM Capital Group. "Ascentium Capital will allow us to partner with a wide range of small businesses, providing them with necessary growth capital unavailable through other resources."
“We appreciate that Vulcan, LKCM and our other partners recognise the significant opportunity and growth potential in lending to small businesses outside of the traditional bank model,” says Tom Depping (pictured). “These small businesses need to access capital quickly, efficiently and at competitive rates. Ascentium Capital brings a seasoned team of small business lenders with specialised services, lending flexibility, and the support of our strong partners to meet the needs of small businesses. We will also look to make acquisitions, purchase portfolios and add small business originators and brokers to our platform.”
Ascentium Capital’s senior management team brings over 80 years of combined experience in commercial lending. Depping joined Main Street Bank in 2004, helping the bank become a national leader in providing equipment financing throughout the country. Previously, Depping founded First Sierra Financial, Inc., a publicly-held small-business finance company with more than USD3 billion assets under management, which was acquired by American Express in 2001.
Milestone Advisors, LLC, served as the financial advisors to Main Street Bank for the transaction.
