FIIG and Carnegie join forces
Fixed income dealer FIIG Securities and private equity firm M.H. Carnegie & Co. have joined forces to create a new joint venture business that will source high yield investment opportunities in entrepreneurial and high growth companies for institutional funds and high net worth investors. FIIG and Carnegie have recruited prominent private equity and banking executive Neil Sutton, formerly of HBOS and Gresham Private Equity, to be head of the new joint venture business called Alternative Debt Services (ADS). FIIG CEO Mark Paton said ADS would fill a market gap that had been created by the retreat of the banks from providing all but plain vanilla debt funding in the wake of the new Basel III rules while also offering wholesale investors the higher yield products they had been seeking. “We have been getting regular feedback from our institutional clients in particular, that they want investments that offer a higher yield than straight debt and generate strong predictable returns,” Mr Paton said. “That middle part of the capital structure is the area that ADS will specialise in and we are glad to have a partner with the proven track record of Carnegie to work with in sourcing these opportunities for our clients.” Mr Paton said the new business was a further addition to alternate debt funding solutions in the market and was developed in response to an increase in enquiry from potential corporate borrowers. The types of investments offered will include junior debt, mezzanine products, and preferred equity capital raisings offering yields of between 10 and 20 per cent. Carnegie principal, Mark Carnegie, said ADS was not limited in the types of companies it would consider funding. “We look to partner with great companies, great ideas and great entrepreneurs and they can be found in any industry,” Mr Carnegie said. “Our fund continues to strive to be the preferred partner and capital provider to companies in the Australian lower middle market. We see a large number of potential partners who are not seeking a simple standalone debt or equity solution, and we believe that there is an opportunity to provide a more flexible funding and partnership solution.” “FIIG has been instrumental in opening up the debt markets for mid-cap corporates through their bond originations so they are a natural partner for us in building a path to the market for these smaller high growth companies seeking a more flexible solution.” A number of large funds and family offices have already indicated that they plan to support the new business.