Firms & Funds

Koch-backed lender Eaglehill explores options after co-founder leaves

-
Koch Industries, Eaglehill Advisors, private equity, Mike Zicari, Jason Cunningham
A bald eagle flies over the Chilkat Bald Eagle Preserve near Haines, Alaska, Oct. 6, 2014. REUTERS/Bob Strong
  • Eaglehill launched in 2014 by two Citi bankers
  • Brought on ex-Citi banker Matas as senior adviser
  • Options could include secondary process

Two Citigroup bankers in 2014 formed a private lending shop that got big backing from Koch Industries in the form of a $100 million commitment to the firm’s debut fund.

That firm, Eaglehill Advisors, is now exploring strategic options after one of the founders, Mike Zicari, resigned in March for undisclosed reasons, according to Eaglehill’s Form ADV filed in September. 

The firm appointed former Citi banker Barbara Matas to the investment committee. Matas is not considered an employee of the firm, the Form ADV said. 

In August, Eaglehill hired PJT Partners, which owns placement agent and secondary advisory shop Park Hill Group, to work on a potential secondary offering, the document said.

It’s not clear whether Zicari’s departure triggered a provision that would enable investors in Fund I to immediately stop the GP from investing their money.

This so-called key-man provision is generally triggered after one or more key executives leave a firm. 

No one from Koch responded to a request for comment. Spokespeople for Eaglehill and PJT declined comment.

Zicari and Jason Cunningham formed Eaglehill in 2014. Cunningham formerly was a managing director in Citi’s alternative-asset group. Zicari was a managing director in the leveraged-finance and liability-management groups at the bank.

Eaglehill closed its debut last year on $250 million, Buyouts reported. Koch provided a $100 million anchor commitment. Whether that commitment came with special terms for Koch is unclear.

Interestingly, the firm set up provisions if the fund lasted into its extension periods. Most PE funds have 10-year fund lives plus two one-year extensions, though credit funds often have shorter terms.

For Eaglehill, the fund’s management fee would drop from 1.75 percent on invested capital during the harvest period to 1.25 percent on invested capital during the first one-year extension, Buyouts reported. If the fund was extended for another year, the fee would drop to 0.75 percent of invested capital.

Eaglehill launched to lend to North American middle-market companies backed by PE firms. One recent deal came in March when Eaglehill participated in financing Wind Point Partners’ acquisition of Ox Engineered Products, which makes sheathing and thermal insulation building products.

Preeti Singh contributed to this report.

Action Item: Check out Eaglehill’s Form ADV here: https://bit.ly/2jbW0Qk