Churchill lending business resurrects under TIAA-CREF

The original founders of Churchill Financial, which was acquired by Carlyle in 2011, have come together again with a new credit venture under insurance and asset management company TIAA-CREF

US insurance and retirement fund management firm TIAA-CREF has hired the original founders of Churchill Financial to start a new mid-market lending business. The group, called Churchill Asset Management, is a majority-owned subsidiary under TIAA-CREF.

Four executives Kenneth Kencel, George Kurteson, Randy Schwimmer and Alastair Merrick have all joined TIAA-CREF as part of the new business. Kencel is president and chief executive at Churchill Asset Management. Kurteson heads underwriting and portfolio management, Schwimmer is the head of origination and capital markets, while Merrick holds the title of chief financial and administrative officer, the same role he had at the predecessor Churchill firm.

The lender launched this week and are based in TIAA-CREF’s New York office.

Churchill Financial was acquired by The Carlyle Group in November 2011 and the four founders had all subsequently left Carlyle over the course of 2014. They had been planning to regroup with a new venture. At the time of the acquisition by Carlyle, a statement said that Churchill had served as an agent on $7 billion of senior credit facilities and completed about 200 financing transactions since its foundation in 2006.

Kencel resigned from his role as president of Carlyle GMS Finance in May last year. Schwimmer was the head of capital markets in Carlyle GMS Finance and resigned in January of the same year, while Kurteson, formerly a managing director at Carlyle GMS Finance, shifted to an external advisory role. Merrick had never joined Carlyle. Instead he worked as chief financial officer and treasurer at WhiteHorse Financial, a BDC managed by H.I.G. Capital, from 2012 to 2014, according to his LinkedIn profile.

Schwimmer also writes a leveraged finance newsletter, The Lead Left, which he will continue doing under TIAA-CREF.

The new TIAA-CREF subsidiary will focus on originating, underwriting and managing senior loan investments, primarily in US mid-market companies, said a statement from TIAA-CREF today (8 April).

“Our investment in Churchill complements our existing platform and offers an attractive source of risk-adjusted yield and credit diversification,” Robert Leary, executive vice president and president of asset management at TIAA-CREF, said in a statement. “It also provides additional opportunities to invest in vehicles that offer compelling sources of income in today’s low-interest rate environment.”

TIAA-CREF’s broader asset management platform consists of $851 billion invested across a variety of strategies including equity, fixed income, real estate, other real assets and private equity. Churchill follows several other asset management transactions, including the acquisition of Nuveen Investments in 2014, the formation of a real estate investment venture with Henderson Global Investors in 2013, timber manager GreenWood Resources in 2012 and agriculture firm Westchester Group in 2010.

“We are excited about this opportunity to partner with TIAA-CREF as we look to build a best-in-class middle-market senior loan investment business. Our strong risk management culture and rigorous underwriting and investment process is an excellent fit with TIAA-CREF’s heritage and proven history in fixed income,” Kencel said in a statement.

The new venture will focus on making mid-market senior secured loan investments through various investment vehicles including co-mingled funds, separately managed accounts, CLOs and other products.