Merrill Lynch has hired Greg Margolies, an ex-employee of The Carlyle Group, indicating the firm may be moving back up the leveraged finance ladder. Jack Mann, global head of leveraged finance origination, has brought Margolies back to Merrill, where he was a banker before moving to Carlyle. Margolies, who was most recently at DB Capital Partners, will focus on corporates, financial sponsors and to some extent distressed debt bond investors, said a Merrill spokesman. He declined to elaborate on the role. One source said he was going to cover vulture firms and hedge funds that are taking control of companies. Calls to Margolies and Mann were not returned.
Merrill has been active lately with a lead role on the Qwest Corp. term loan, syndicated to institutional players and hedge funds. The firm is also in the market with acquisition financing for Colfax (see stories, page 3). "We continue to use the balance sheet selectively where we believe it will generate the highest profitability," the spokesman added.
Margolies previously headed up a $1 billion mezzanine fund run by DB Capital Partners, a unit of Deutsche Bank. He joined DB Capital from Carlyle, where he was co-head of Carlyle High Yield Partners' mezzanine and equity investment efforts. Before that he was a director in the high yield capital markets and syndicate group at Merrill. The mezz fund never really got off the ground and then Deutsche Bank put the private equity business up for sale, a source said. Ted Virtue, chairman and ceo of DB Capital, led a management buyout, but the new platform did not lend itself to mezzanine, said a private equity source, speculating on why Margolies did not join Virtue.