But this type of give-and-take partnership doesn’t happen overnight. It is the result of years of relationships based on trust and transparency. Many Twin Brook professionals have put a lot of time and effort into cultivating relationships with reputable private equity firms.

Grant Haggard, senior partner at Twin Brook, cites a client he interacted with for nearly a decade before they struck a deal together. “It took time and effort to be able to complete a transaction. But when we did, the deal worked extremely well and we built a long-term relationship with this client, ”he says. “Some lenders are more transactional, and that’s good, but that’s not how we operate. “

Shortly after its inception, this particular sponsor was one of the first that Twin Brook made a deal with, and they’ve partnered in seven more deals since then.

In early April, in the grip of the pandemic, the sponsor had a portfolio company that was in the process of breaking up and combining with a competitor. The transaction was complex and COVID-19 added even more uncertainty, Haggard recalls.

“If there hadn’t been a relationship, this deal might not have happened; very few other lenders would have accepted this transaction at that time. But we had confidence in them and a strong working relationship, so we were able to move forward, ”he says. “We have had a long experience with this sponsor and a glimpse into how it works – seeing them successfully execute their growth strategies for businesses and manage them through good and bad times – and this has allowed us to make us comfortable. “

Value of a true partner

Some sponsors want the cheapest prices and treat lenders as a transactional part of the deal, but others, like Incline Equity Partners, recognize the value of a deeper partnership.

“We want to make sure that we are working with lenders who are able to respond quickly and meet their commitments in a transparent manner. “It’s easy to talk about a big game when everything’s going wild, but the offers are tested. “

Rubinov adds: “It’s often easy to get a deal funded. It’s hard when things go wrong. That’s when you need a real partner, and that’s why we value building ongoing relationships with lenders.

Grow together

Some private equity firms look to their lenders for flexibility and sound advice. Many also need a lending partner who can scale as their portfolio companies grow.

Arsenal Capital Partners sees itself as a business builder, crafting transformation strategies for businesses and creating high growth market leaders. “We have to work with a lender who can scale with our businesses because we can start with a business with $ 10 million or $ 15 million EBITDA that we want to grow to $ 100 million or more,” said Roy Seroussi, partner of investment from Arsenal. . “It’s an intensive approach. Our primary focus is often not to optimize pricing or covenants, but to find a lending partner who understands what we are trying to do with our businesses.

For Arsenal, there are a multitude of factors to consider when building a loan partnership. “Our relationship with Twin Brook has been very collaborative. They were flexible and proved their added value for us, ”says Seroussi.