In fact, the firm expects to close 10 to 15 deals in the fourth quarter. Christopher Williams, a founding partner at Madison Capital Funding, called to clarify that after I wrote some apparently ambiguous comments on middle market lending pullbacks.
So let it be known: Madison Capital has cash to spend. The firm has not narrowed down its deal criteria over the last few weeks, as I had written. The only change, Williams said, is that Madison Capital is pushing for the absolute latest financial performance numbers on companies. “The last thing we want to do is book a company that we haven’t seen its most recent monthly numbers,” he said. “No stale financial information.”
Madison Capital’s number one competitor , however, appears to be in dire straights. Various reports and sources say that GE has basically retreated to the sidelines for the quarter. A spokesperson for GE Capital denied this, saying the company’s lending teams remain open for business in the fourth quarter.
I asked Williams to explain what Madison Capital has done differently than GE, or perhaps than other mid-market lenders who might be pulling back?
He said the firm is funded by its “very stable” parent company, the privately held mutual insurer, New York Life. Furthermore, Madison Capital “is not subject to public company quarterly earnings reports and don’t have any of the public pressure, so NY Life looks at it from a long term perspective.” Madison Capital shares that mentality, which is “we’re in it for the long haul, let’s do what’s right for the business, and underwrite deals conservatively.”
GE, on the other hand, has been underwriting large facilities and taking large hold positions, he said. “They’ve been doing everything they should not have been doing in this market.”
Williams declined to comment on specific numbers for his firm but said Madison Capital’s Q4 numbers will likely outperform its Q1 numbers from this year, and that Q1 was a record year for the firm.
The spokesperson for GE Capital said the firm is honoring all existing commitments and closed five sponsor deals totaling $800 million in the past two weeks.