GoldenTree Asset Management will look to raise several hundred million dollars for a fund to be launched in January that will lend to middle-market companies, according to Corporate Financing Week , a Loan Market Week sister publication. GoldenTree, which manages approximately $5.6 billion in loans and bonds, will provide loans of varying seniority and will join a growing list of hedge fund firms that are creating dedicated funds for direct lending. Soros Fund Management and Contrarian Capital Management are among the more notable recent examples, while SilverPoint Capital has been very active this year (LMW, 9/28).
Tom Shandell , a founding partner of GoldenTree, will manage the fund, according to a Goldman Sachs prime brokerage document, along with Steve Tananbaum , the firm's cio, and Jonathan Ezrow , who resigned from a post as co-head of high-yield capital markets at Credit Suisse First Boston to join GoldenTree earlier this year. Shandell declined comment
In creating the fund, GoldenTree is looking to capitalize on commercial and investment banks' departure from middle-market lending. There is a perception that middle-market deals are illiquid and the banking fees are seen as peanuts by banking giants created from mega-mergers of recent years, said a source. Distressed lending will also be a focus of GoldenTree's fund. At least one sell-sider likes GoldenTree's chances. "For [middle market] companies, the capital markets don't always respond as fluidly and efficiently as they might. These companies are important to our economy, but they're a niche that's somewhat underserved. A fund like GoldenTree, especially given the quality of people they have, could be very successful," said Tom White , global head of leveraged finance at Banc of America Securities .