Middle-market companies looking for capital often find themselves caught between banks who might consider them too small for a debt commitment, and private equity firms that demand majority control as the price of an investment.
Aequitas Capital, a Portland, Ore.-based alternative-asset management firm, aims to meet the needs of this under-served market by structuring customized debt and equity deals.
Thomas Goila, senior managing director of private credit and private equity and a nine-year Goldman Sachs veteran prior to joining Aequitas in August, is responsible for finding transactions that offer attractive risk-adjusted returns for Aequitas.
“At Goldman, I was able to find different types of deals and structure appropriate investments for companies that could help them grow, and then structure a thoughtful way to do that,” Goila told Markets Media. “It could be anywhere from senior debt to equity, or some sort of hybrid structure in between."
At Goldman, where he worked as a senior investment professional in the Specialty Lending Group, Goila specialized in middle-market investments ranging from $20 million to $200 million, focusing on originating, structuring, underwriting, and syndicating debt and equity investments using Goldman Sachs' balance sheet capital.
“That is something that I am going to be doing here at Aequitas as well, that is, finding deals and helping companies find the right capital structure for them, and then using the various Aequitas sources of capital to marry those up so we can create sort-of a win-win solution for companies, as well as for Aequitas and our investors,” Goila said.
Aequitas has the flexibility to structure different types of deals without demanding a huge equity stake in return. “We can look at deals on a unique basis, and structure them to help fit for the company, as opposed to saying, “I have the private equity funds but I have got to have a minimal of 70% of your company,’” Goila said. “We are happy to take minority positions in companies, or structure a debt package or a preferred-equity package that is not overly onerous.”
Smaller companies that are viewed by banks as having less than stellar financial strength are of companies form the core of Aequitas Capital’s investments.
"A lot of them are rapidly growing, so if you look at their trailing 12 month financials, they do not look that great,” said Goila. “But if you look at their last 6 months or their last quarter, they look very much different, because they have opened new stores or they have new sales channels. We are willing to do more due-diligence to understand the value of a company.”
