Madison Capital reaches out to family investors

  • Exec Andrew Bucolo takes aim at increasingly active group
  • Middle-market lender noticed hiring by family investment groups
  • Madison Capital has closed two lending deals with high net worth families

Madison Capital Funding, the middle-market lending unit of New York Life, has closed at least two deals with family investment groups as it works to attract more transactions to address this market opportunity, an executive at the firm said.

Andrew Bucolo, managing director at Madison Capital, said a fresh objective of the firm’s 13-person business development team is to focus on potential borrowing needs of family investment groups, which have been more active over the past couple of years. He declined to provide any details on completed financing transactions with family groups.

“We’ve spent our energy focused on traditional private equity-committed funds, but we’ve found there are a lot of opportunities with folks who are private investors but may have a family office,” Bucolo said. “That’s not an area we’ve focused on, so we’re putting more resources toward it.”

Madison Capital became aware of the trend after noticing a number of private equity executives getting recruited by family investment groups.

“We’ve seen some of our good customers lose some of their seasoned private equity professionals to family offices,” Bucolo said. “We’ve gotten calls from those folks now working on private wealth funds. It’s a good dynamic and it’s helping to grow private equity overall. It’s something we wanted to make sure we weren’t ignoring.”

Paul Carbone, managing partner at Pritzker Group Private Capital, said he couldn’t speak to Madison Capital’s specific effort to reach out to family investment groups. In general, he said, he is seeing more interest among family investors in doing direct deals rather than just participating in funds.

Family business owners are increasingly interested in working with other family providers of more permanent capital rather than just looking to partner with strategic buyers or traditional private equity firms.

“We are increasingly seeing service providers and lenders recognizing these trends and allocating both financial and human capital to participate in them,” Carbone said.

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