Cowen Group Inc. (Nasdaq: COWN) has developed a new commercial finance company, Cowen Finance.

New York-based Cowen expects to make an initial equity investment of up to $125 million in the new direct lending operation. Cowen Finance will work with Cowen and Co.'s investment banking and debt capital markets business to originate, syndicate and use Cowen's capital to provide a broad range of credit options to corporations.

"Given the diminished lending appetite by traditional banks into the middle market, companies and financial sponsors have expressed their need for a broader range of lending solutions," says Jeffrey Solomon, president of Cowen.

Cowen Group is a diversified financial services firm that provides alternative asset management, investment banking, research and sales and trading services through its business units.

Angelo Gordon & Co. LP also announced the formation of a direct lending company on Sept. 29, along with the hires of Trevor Clark and Chris Williams, who were formerly with Madison Capital Funding LLC. That group will focus on lending to companies with Ebitda between $3 million and $50 million.