Freeport Financial Empties Ship

Mid-market lender Freeport Financial has laid off most of its 23 employees, peHUB has learned. The Chicago-based firm’s remaining professionals will help manage the existing portfolio, which currently has just over 60 loans (Freeport is lead agent on around half of them).

Freeport was formed around five years ago, with the backing of hedge fund manager Stark Investments. A source says that Stark is not interested in selling off the existing Freeport credits – either piecemeal or altogether – believing that it has a better chance to recoup its money by winding down the portfolio over time.

In a prepared statement, Stark said: “Freeport remains committed to actively managing its loan portfolio. In addition to the resources at Stark Investments, a team of Freeport professionals has been retained to ensure continued oversight and management of the portfolio. Importantly, Freeport has secured long-term financing for the Freeport loan portfolio and will be able to fulfill all loan commitments.”

A Stark spokeswoman declined to comment further.

Freeport’s remaining team includes: Matt Gerdes, managing director of capital markets; Josh Howie, managing director of originations and portfolio management; Steve Papalis, managing director of underwriting and portfolio management; and Joe Walker, also a managing director of underwriting and portfolio management.

The firm had provided first and second-lien notes, plus mezzzanine debt and equity co-invests in transactions ranging in size from $10 million to $500 million. It came close to being acquired last year by Oriz Corp. (there even was a signed LOI), but the deal ultimately fell apart.

Last Friday, peHUB reported on layoffs at fellow mid-market lender Churchill Financial.