CVC Credit, Coller Capital acquire Northport Capital from Resource Capital

NEW YORK, Aug 4 (TRLPC) - A partnership between CVC Credit Partners (LSE: 0QOQ.L - news) , the credit management business of CVC (Taiwan OTC: 4744.TWO - news) , and Coller Capital, a private-equity secondary business, has acquired lender Northport Capital TRS from Resource Capital Corp (NYSE: RSO - news) , according to a news release on Thursday.

CVC Credit will manage the partnership backed by capital from Coller, which has also provided additional undrawn capital that can be deployed to lend to companies going forward, Tom Newberry, head of private funds at CVC, said in a telephone interview.

Northport provides credit facilities to private middle-market companies across North America and the assets CVC will now manage include first- and second-lien loans to middle-market borrowers.

As banks have pulled back from some lending opportunities following increased pressure from regulators to improve their underwriting standards, direct lenders have been able to step in and fill the gap. In 2013 the Federal Reserve, the Federal Deposit Insurance Corp and the Office of the Comptroller of the Currency released updated leveraged lending guidance noting "prudent underwriting practices" had deteriorated.

"There are a lot more situations where banks can't underwrite the risk or are less comfortable doing so," Newberry said. "We think it is an ongoing opportunity and we think getting this team gives us the opportunity to address that."

CVC has an established direct lending platform in Europe and the Northport team will help develop CVC's direct lending platform in the US, Newberry said. The acquisition, which was completed Thursday, will increase assets under management for CVC Credit's global direct lending strategy to about $1 billion, according to Thursday's news release.

Northport was led by David DeSantis and he and his team will join CVC Credit in New York, reporting to Newberry.

Resource Capital will oversee additional assets Northport managed including some syndicated second-lien loans, Newberry said. (Reporting by Kristen Haunss)