Emerald Asset Management acquires direct-lending company
Emerald Asset Management Inc., an investment management holding company based in Manheim Township, Lancaster County, announced today that it has acquired Direct Lending Capital LLC.
DLC, now renamed Emerald Direct Lending Capital LLC, will be based out of EAM’s headquarters but maintain regional headquarters at its offices in Oceanside, Calif., according to a news release.
Emerald described DLC as a pioneer in investing in loans generated in the new and quickly developing direct-lending (or peer-to-peer) business. Emerald DLC and its team members joining Emerald — Howard Freedland, Richard Keller, Simon Leach and Lakshmi Narasimhan — will direct client investments in the notes, certificates and loans to be generated by the rapidly growing direct-lending market.
“We are excited to work with the innovative team at Direct Lending Capital as an early investor in this exciting new investment space,” said Joseph E. Besecker, chairman and CEO of EAM. “We believe that the marriage of Emerald’s institutional investor focus and DLC’s expertise in selecting and managing direct lending portfolios creates a strong opportunity for our newly combined business and its clients.”
According to a news release, the direct-lending industry matches lenders and borrowers through various online marketplaces, freeing both the borrower and the lender from the constraints and overhead associated with the traditional bricks and mortar banking system. Emerald DLC employs a proprietary methodology to screen loans and analyze credit quality, bundling larger numbers of loans together to further reduce risk and diversify investor portfolios.
Emerald said peer-to-peer lending has experienced significant growth in the past seven years with total dollars loaned exceeding $2 billion, increasing from $1 billion in less than a year. Emerald gained valuable experience in the credit markets successfully managing an institutional portfolio as part of the Term Asset-Backed Securities Loan Facility, or “TALF” program, of the New York Federal Reserve Bank.
Founded in 1991, EAM also maintains offices in King of Prussia and Pittsburgh and operates through its wholly-owned subsidiaries Emerald Advisers Inc., Emerald Separate Account Management LLC and Emerald Mutual Fund Advisers Trust. Emerald Advisers and PMG Advisors LLC jointly own Emerald Fixed Income Advisers LLC. Assets managed by these companies totaled approximately $2.4 billion as of June 30, 2013.