“The rise in private debt has been tremendous over the last three or four years,” says Sunil Mehta, managing director, Madison Capital Funding LLC, in this video interview shot at ACG InterGrowth 2018. Investors from all over the globe are attracted to this asset class. “There aren’t very many asset classes that have performed this consistently over the last 10 or 15 years, and you have asset managers in the class that have been able to perform for not only two or three years but for decades.” Madison, a subsidiary of New York Life Insurance Co., has long been a stellar source of capital in the middle market. Since its founding in 2001, the Chicago lender has invested $29.2 billion of net funded commitments in 1,075 transactions with 287 different private equity sponsors. For more on Madison’s approach, read our Q&A with Jennifer Cotton: Abundance of capital drives highly competitive loan process, says Madison Capital’s chief underwriter.
M&A TALK: Rise of Private Debt with Sunil Mehta of Madison Capital Funding
QUESTION: Why is there more interest in private debt today?
MEHTA: The rise in private debt has been tremendous over the last three or four years. What you are seeing is investors all over the globe be attracted to this asset class. There aren’t very many asset classes that have performed this consistently over the last ten or fifteen years and you have asset managers in the class that have been able to perform for not only two or three years but for decades. So, when investors see these consistent returns, over many years, they are definitely attracted to this asset class.
QUESTION: How does Madison Capital Funding stand out?
MEHTA: As the supply of capital is increased in the lending landscape, there could be five, ten or fifteen lenders chasing a single transaction. At Madison Capital, we differentiate ourselves in a couple of different ways. The first one is our ownership structure. We’re owned by New York life, an AAA rated company and we’ve been under the same ownership structure for the last 17 years. The second way in which we differentiate ourselves is the industry vertical industry expertise that we have. We have three specialty verticals: insurance and financial services; healthcare; and software and technology services.