What's Next for Churchill and Peers?
It's clear that the world of middle-market lending is in a state of distress. The CLO market doesn't seem ready to return as a source of capital for lenders -- and therefore companies and buyouts -- anytime soon. What's a lender to do? Some players suspect the business model will have to change. Take, for example, Churchill Financial. The middle market lender has remained largely on the sidelines since February of this year, when it laid off several members of its origination team, and several others left voluntarily. Casey Zmijeski turned up at Fifth Street Finance; Timothy Clifford and Sean McKeever started the leveraged lending arm of Amalgamated Bank, called Amalgamated Capital. Churchill's competitors NewStar Financial, Orix Corporation, National City Madison Capital followed suit with headcount reductions. Freeport Financial laid off almost its entire staff as it liquidates assets. Like several of its peers, Churchill has been "stuck in neutral" as an asset manager with little to no new deal activity. But that doesn't mean it has no capital to deploy.
