Lead Left Interview – Chris Flynn and Sam Tillinghast (Part 2)

This week we continue our conversation with Chris Flynn and Sam Tillinghast, co-CEOs and co-CIOs of THL Credit. Headquartered in Boston, with investment teams in Chicago, New York, Los Angeles and Houston, THL Credit manages a BDC that invests primarily in middle market mezzanine debt for companies seeking capital for growth and acquisitions. 

Second of two parts – View part one

The Lead Left: The demand side does drive crazy structures and pricing at times.

Chris Flynn: We struggle when you tell us that 70% of the capital structure is debt and carries a cost of 6% and 30% of the capital structure is equity with a target return north of 25%. Lots of people are chasing deals, but it’s up to the senior managements of these firms to incentive people the right way.

TLL: Do you think the pressure on leveraged lending guidelines will restore some sanity?

Sam Tillinghast: The pressure from regulators does appear to be getting more focus, so we’re seeing pushback on structures. The opportunity for us is to come in with more flexibility to give sponsors more room and potential alternatives to traditional bank financing.