BMO and Canal Road Group to invest $1bn in upper-middle-market direct lending
North American bank BMO has partnered with alternative asset manager Canal Road Group to invest up to $1bn (£825m) to its direct lending strategy.
The partnership aims to broaden sponsor and corporate clients’ access to the private lending capital pool. CRG will benefit from BMO’s network of banking relationships, adding a strategic origination source.
It will also combine BMO’s banking client reach, origination, and capital markets expertise with CRG’s growing capital base and investment management.
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BMO will receive access to CRG’s network of borrowers, lenders, sponsors, and management teams and plans to provide credit facilities to CRG’s strategy over the long-term. As part of the arrangement, BMO will hold a non-voting minority stake in CRG’s management company.
“This exciting project brings BMO together with CRG to offer a full suite of innovative, private financing solutions to our clients,” said Alan Tannenbaum, chief executive and group head, BMO Capital Markets. “By leveraging BMO’s robust banking, capital markets and sponsor finance platforms alongside CRG’s expanding capital resources, clients will have access to the full array of financing solutions tailored to support their evolving needs and strategic objectives.”
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CRG said: ” Through our partnership, CRG will benefit from increased capital, deal flow and access to BMO’s vast network of client relationships. As financial markets and client needs continue to develop, we are confident that this partnership maximizes our complementary strengths and resources, enabling us to deliver solutions that better serve our clients.”
BMO Financial Group has total assets of $1.41trn as of October 31, 2024.
Canal Road Group’s founders Don Young and Mike Damaso previously led CBAM Partners, a $15bn credit platform founded in 2016 and sold to Carlyle in Spring 2022.
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