Capital Dynamics makes debt play

The former co-chief investment officers of Credit Suisse Park View, the Swiss investment bank’s one-time business development company, have launched a private credit arm at Capital Dynamics.

Jens Ernberg and Tom Hall have joined the Zug, Switzerland-based firm as co-heads of its Private Credit Asset Management division and are based in New York, according to Capital Dynamics’ website. Cion Investments, which runs a BDC sub-advised by Apollo Global Management, bought Credit Suisse’s mid-market lending group in September for $276.9 million.

After the sale of their former company, Ernberg and Hall chose not to seek employment from Cion, and instead began looking for a home to start a new direct lending business, sources exclusively told Private Debt Investor.Among the potential partners was a private equity firm looking to start a credit arm.

The new firm would target lower mid-market firms, which translated to businesses generating $10 million to $40 million in EBITDA, the sources said. The firm would be “agnostic”, one source said with respect to pursuing deals involving a private equity sponsor.

Ernberg and Hall had wanted to keep their Credit Suisse team intact, which comprised Dhaval Kapadia, Eric Lee, Michael Smith and Matt Wachtel, sources had told PDI.
However, the four men have since ended up at different firms, according to their LinkedIn profiles. Kapadia ended up at the advisory arm of KPMG, while Lee joined the direct lending team at THL Credit. Smith and Wachtel have been hired by Muzinich & Company and Adams Street Partners, respectively.

Capital Dynamics is the latest in a long string of private equity firms launching credit arms. In the US, recent additions to the private credit list include Francisco Partners, which hired GSO Capital Partners veteran Scott Eisenberg for a debt practice, and The Sterling Group, which brought on BNP Paribas’ Sean Davenport to lead a mezzanine group.

Private equity shops based outside the US, like Capital Dynamics, have also embraced private credit. Finnish firm eQ raised €90 million in commitments from investors from 38 different limited partners for a debut fund. London-based BC Partners hired Ted Goldthorpe, formerly of Apollo, earlier this year and is investing a $200 million opportunistic vehicle. Bahrain-headquartered Investcorp may add a mid-market lending arm following the acquisition of 3i Debt Management.