Tuesday 20 February 2018

Ex-bank boss joins Muzinich Irish arm

George Muzinich who founded the firm in 1988.
George Muzinich who founded the firm in 1988.

Gretchen Friemann

Muzinich & Co, the New York-based fixed-income specialist which won backing from Ireland's Sovereign Investment Fund for a €500m-€1bn pan European debt fund, has opened an Irish office and recruited a former AIB executive to spearhead its local operations.

Howard Mahon - who previously worked in the State-controlled lender's loan workout department known as the Specialised Finance Unit - is the sole representative of the firm in Ireland.

But the credit boutique, which has $34.5bn under management, intends to expand its presence here.

As the Irish Independent reported in May, the firm - founded by veteran investor George Muzinich in 1988 - secured €45m from Isif for its pan-European vehicle.

The State contribution means Muzinich will inject at least €67.5m into Irish SMEs, a sector that remains acutely affected by a credit crunch.

Mr Mahon, who is based in Dublin, told the Irish Independent the firm will target companies with "Ebitdas of between €3m and €30m who are in a strong financial position and are seeking flexible new debt to fund growth opportunities."

He said the loans could be tied to "anything from acquisitions, to entry into new markets or building a new factory".

However he emphasised the firm has no interest in "distressed assets and underperforming loans, nor are we looking at property development."

Mr Mahon - who has assumed the role of director, Pan European private debt - described Muzinich's push into Ireland "as part of a long-term strategy" aimed at "building relationships with corporate advisers and with the private equity sponsor community".

Targeting the short-term focused distressed debt funds has become a well-worn strategy for the influx of new private lenders. Typically these smaller, more nimble players prise off borrowers from the buy-out firms and refinance the loans.

But Mr Mahon stressed Muzinich also intends to partner with the Irish pillar banks - a strategy the credit boutique has pursued elsewhere in Europe. He said "our ability to offer a more flexible financial structure has worked well for the banks and the borrowers".

"As the Irish economy continues to grow we believe there will be increased demand for this kind of lending, which is essential to business growth and job creation," he added.

Muzinich is in the midst of raising money for the pan-European vehicle, which is headquartered in Luxembourg.

Under the deal with Isif, the State-run fund has pledged €40m to the vehicle's first close and €5m to a second funding round.

Irish Independent

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