Boston-based NewStar Financial, the firm founded by former FleetBoston corporate finance boss Tim Conway, has formed Newstar Credit Opportunities Fund with $150 million of equity capital. The equity was provided by a consortium of Och-Ziff Capital Management Group, a current investor in Newstar, and Caisse de depot et placement du Quebec. The fund will be managed by Newstar.
The credit opportunities fund will invest primarily in debt investments and loans. Sectors that the fund will focus its investments on include structured product sectors, the corporate middle market and commercial real estate. The fund will allow Newstar the ability to lead larger transactions than it is currently capable of and will provide asset management growth.
"With this side fund we can invest along side our own funds in the middle market; we can keep the same assets on our balance sheet that we do in the side fund," said Conway, ceo of Newstar. "We can put up to $50 million to a deal with this fund and we are routinely around $35 million. If we need to put together a $100 million deal we can put up $50 million and then go out and get the other $50 million pretty easily," Conway added.
When the offering and other similar debt facilities have been completed, Newstar will have around $2 billion worth of equity capital and committed debt. The equity and debt comes from over 20 institutional investors and financial institutions.
Conway started NewStar in 2004 after seven years at Fleet, where he managed corporate finance and capital markets. He left Fleet in 2002. Prior to joining Fleet, he was a senior securities officer at Citicorp Securities, with oversight of the private placement, loan syndication and acquisition finance businesses.