Webster Bank and Marathon Asset Management Announce Private Credit Joint Venture

Rhea-AI Summary

Webster Financial and Marathon Asset Management have announced a joint venture to finance middle market companies backed by private equity sponsors. Webster Bank, with $76 billion in assets, and Marathon, managing $23 billion, will offer senior secured loans. The partnership leverages both firms' credit expertise and relationships, with over 100 employees collaborating. This venture aims to diversify Webster's revenue and provide larger financing solutions. Key executives from both firms expressed optimism about the benefits of the combined strengths and the potential to enhance client services and generate asset management income.

Positive

• Webster Financial and Marathon Asset Management form a strategic joint venture, leveraging $99 billion in combined assets.
• The joint venture will enhance Webster's revenue diversification and financing capabilities.
• Over 100 employees will collaborate, including investment and business development professionals.
• The partnership will offer senior secured loans across various industries.

Negative

• None.

Insights

Financial Analyst

The joint venture between Webster Bank and Marathon Asset Management is a significant step, notably enhancing their direct lending capabilities in the middle market segment. This collaboration leverages Webster Bank’s extensive credit solutions and banking services experience with Marathon’s notable expertise in asset management and credit markets. For retail investors, this alliance highlights the potential for increased revenue diversification and enhanced asset management income for Webster Bank. Importantly, the partnership enables both firms to offer larger financing facilities and broader solutions to their clientele, which can be a competitive advantage in attracting more private equity sponsors and middle-market companies.

Historically, strategic alliances like this can provide substantial value by pooling resources and expertise, creating synergies that can lead to improved financial performance. However, investors should also be aware of execution risks, as integrating teams and aligning operational processes between two large entities can be challenging. Additionally, the capital-intensive nature of direct lending requires prudent risk management and vigilant oversight to ensure sustainable returns.

Market Research Analyst

From a market perspective, the partnership between Webster Bank and Marathon Asset Management is a robust alignment aimed at strengthening their foothold in the middle market lending space. This sector is characterized by firms with revenues ranging from $10M to $1B, often requiring tailored financing solutions. By combining their expertise, the two firms can better address the nuanced needs of this segment. For retail investors, it's beneficial to note that the middle market often provides steady and lucrative growth opportunities due to its diverse industry representation and relatively lower volatility compared to large-cap markets.

Middle market companies typically seek financing for acquisitions, growth initiatives and recapitalizations – areas where direct lending can play a pivotal role. The unique value proposition here is the integration of Marathon’s credit market knowledge with Webster’s banking product suite, potentially resulting in better-structured loans and lower default risks. However, market conditions, such as interest rate fluctuations and economic cycles, can significantly impact this segment. Retail investors should keep an eye on these external factors which can influence the partnership's success and, consequently, the companies' financial performance.

Synergistic and strategic partnership will finance middle market companies of private equity sponsors

STAMFORD, Conn.--(BUSINESS WIRE)-- Webster Financial Corporation, the holding company for Webster Bank, N.A. (“Webster Bank”), a top performing commercial bank with $76 billion in assets, and Marathon Asset Management, L.P. (“Marathon”), a leading global credit manager with $23 billion in assets under management, today announced they are forming a private credit joint venture, which will deliver direct lending solutions to sponsor-backed middle market companies.

The partnership combines each firm’s credit expertise, private equity sponsor relationships and standing in the middle market with Webster Bank’s full banking product suite that serves companies primarily in the middle market and Marathon’s 26-plus years of experience in asset management. The joint venture will originate directly sourced senior secured loans across various industries in which Webster Bank and Marathon have established track records of investing, with more than 100 employees from both companies working closely together, including investment and business development professionals.

Webster Bank’s Sponsor & Specialty Finance Group has provided credit solutions and other banking services to the portfolio companies of private equity sponsors for two decades. Its dedicated team of over 50 bankers has fostered relationships with more than 125 sponsors nationwide.

“This joint venture allows Webster to better serve and support our clientele, while at the same time diversifying our revenue and realizing a greater portion of our Sponsor franchise’s capabilities,” said John Ciulla, Chairman and Chief Executive Officer, Webster Financial Corporation. “We will be able to offer our clients larger facilities and additional financing solutions alongside the outstanding client experience Webster has always provided. Expanding our capabilities with this venture will have the added benefit of generating asset management income.”

“We are excited to partner with Marathon as we augment the credit solutions available to our clients,” added Andre Paquette, Group Head of Sponsor & Specialty Finance at Webster Bank. “Webster has a strong sponsor finance business, reliable execution and client-centric approach. This will complement Marathon’s long operating history, deep knowledge of the credit markets and proven asset management expertise.”

“Marathon is proud to announce this unique private credit partnership with Webster Bank,” said Bruce Richards, CEO and Chairman, Marathon. “Both companies possess deep private equity sponsor relationships, a strong reputation in the middle market, and a renowned investment team dedicated to middle market lending. By combining our strengths, together we have created a powerful partnership in direct lending that will benefit our investors for years to come.”

Marathon’s direct lending business provides private equity sponsors with creative financing solutions for acquisitions, refinancings and recapitalizations, while also providing borrowers with private credit asset-based lending and capital solutions.

“This partnership with Webster Bank is a natural extension of our collaboration over several years,” added Curtis Lueker, Managing Director and Head of Direct Lending, Marathon. “Together, we look forward to serving private equity sponsors as a trusted and reliable capital provider with full capabilities.”

About Webster Financial Corporation

Webster Financial Corporation (NYSE:WBS) is the holding company for Webster Bank, a leading commercial bank in the Northeast that provides a wide range of digital and traditional financial solutions across three differentiated lines of business: Commercial Banking, Consumer Banking and Healthcare Financial Services, one of the country's largest providers of employee benefits and administration of medical insurance claim settlements solutions. Headquartered in Stamford, CT, Webster Bank is a values-driven organization with $76 billion in assets. Its core footprint spans the northeastern U.S. from New York to Massachusetts, with certain businesses operating in extended geographies. Webster Bank is a member of the FDIC and an equal housing lender. For more information, including past press releases and the latest annual report, please visit the company’s website at www.websterbank.com.

About Marathon Asset Management

Marathon is a leading global credit manager with $23 billion of capital under management. The firm was founded in 1998 and is managed by Bruce Richards, CEO & Chairman, and Louis Hanover, CIO, and employs approximately 190 professionals, with a 20-member Executive Committee and 8 Partners that include Christine Chartouni, Ed Cong, Jason Friedman, Jeff Jacob, Jamie Raboy, and Andy Springer. Its corporate headquarters are in New York City, and it has offices in London, Miami, Los Angeles, and Luxembourg. Marathon is a Registered Investment Adviser with the Securities and Exchange Commission. For more information, please visit the company’s website at www.marathonfund.com or contact Curtis Lueker, Managing Director and Head of Direct Lending at 212-500-3088 or clueker@marathonfund.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240701574857/en/

Webster Financial Corporation Media Inquiries

Alice Ferreira

acferreira@websterbank.com

203-578-2610

Webster Financial Corporation Investor Inquiries

Emlen Harmon

eharmon@websterbank.com

212-309-7646

Marathon Asset Management Media Inquiries

Prosek Partners

pro-marathon@prosek.com

646-818-9283

Source: Webster Financial Corporation

FAQ

What is the purpose of the joint venture between Webster Financial and Marathon Asset Management?

The joint venture aims to finance middle market companies backed by private equity sponsors, offering senior secured loans.

How much in assets does Webster Financial manage?

Webster Financial manages $76 billion in assets.

What are the combined assets under management of Webster Financial and Marathon Asset Management?

The combined assets under management total $99 billion.

How many employees will collaborate in the joint venture between Webster Financial and Marathon Asset Management?

Over 100 employees from both companies will collaborate in the joint venture.

What type of loans will the Webster Financial and Marathon Asset Management joint venture offer?

The joint venture will offer senior secured loans to middle market companies.

What is the stock symbol for Webster Financial ?

The stock symbol for Webster Financial is 'WBS'.