In October, SLR Capital Partners appointed Mac Fowle as president of Asset-Based Lending. In this newly created role, Fowle leads the expansion of SLR's ABL platform by leveraging his more than 20 years of experience in the ABL industry for U.S. middle market borrowers. Fowle reports to Michael Gross and Bruce Spohler, co-founders of SLR, and Cedric Henley, chief risk officer of Specialty Finance. Prior to joining SLR, Fowle served as global head of Asset-Based Lending for J.P. Morgan Commercial Banking, responsible for leading the ABL group and supporting client financing needs for Commercial & Investment Banking clients. 

    Here TSL Express sat down with Mac Fowle and Cedric Henley to discuss the new role and first priorities.

TSL: Congratulations on your new role! What drew you to SLR Capital Partners and led you to accept the newly created position of president of ABL?

Mac Fowle: Thank you for the kind words. The decision was two-fold. First, I was drawn to the emerging opportunity set for private credit firms across the ABL landscape, which has been evident for a while now. The market share gains in ABL by nonbank lenders, relative to the banks, tell a very interesting story. Clearly, there is demand for flexible financing structures that is not being met by the traditional, regional banks. The cumulative impact of higher interest rates over the last few years, relative to where we've been operating in the preceding 10-plus year time frame, coupled with inflation and the disruption from tariffs on trade and supply chains, has led to pretty meaningful margin compression for many companies. These factors, along with weakening fundamental conditions in some industries, has strained liquidity for many borrowers. That confluence of factors has created opportunity for ABL structures to provide greatly needed working capital and liquidity solutions for companies that don’t fit the traditional bank lending model. In particular, private credit ABL has historically proven it is the most natural home for financing companies that are going through transition, and I think there's real opportunity for it going forward.

Second, I was focused on finding the right fit for me within the private credit industry. What I found compelling about SLR is the breadth and depth of their ABL platform. I knew SLR from prior experience, but as I got to know them better, I gained a greater understanding and appreciation for the foundational strength of their franchise. I concluded that leading ABL at SLR would give me an incredible opportunity to leverage my skill set to further grow the firm’s ABL capabilities. It's about being in the right place at the right time, and from my standpoint, SLR is the perfect platform for the current market environment, given the diversity of their product set. There are a lot of firms that play in some of SLR’s markets, but I don't know many firms that do everything that they do and do it as well.

As ABL and the specialty finance space continue to evolve, what market trends are you paying closest attention to?

Fowle: We're paying a lot of attention to the broader macro backdrop because that creates the opportunity for private credit. We are flexible capital at a time when most borrowers should value having some flexibility. It's like an insurance policy; when there's uncertainty, having access to a little incremental liquidity is critically important, and I think private credit, SLR in particular, is in a unique position to be able to provide that now. Banks certainly can too, but I think that there is more natural appetite from private credit managers than there is from regulated financial institutions.

Henley: We’re highly focused on direct lending to middle-market companies in need of ABL, whether they're sponsor-backed or entrepreneur-backed. We're not doing ABS that you hear about, whether that's buying consumer loans, student loans, or mortgages. SLR is focused on direct lending to corporate entities where we enter into bilateral agreements with the companies. Mac touched on a lot of really great points because I do think that we are at this inflection point relative to private credit and its role in ABL and the challenges that financial institutions and banks have with providing that type of product to their customers.

Fowle: There's a lot that's changed over the years, and there are different ways that ABL can be of value to different companies at various stages of their life cycle. When companies are facing liquidity challenges while going through transitions, it is a critical period; I think there is a lot of opportunity to bring value to those clients when they need it most.

In your view, what differentiates SLR’s ABL offering from other middle-market private credit platforms?

Henley: There are certainly other players in the private credit arena that are offering ABL, but what differentiates SLR is the depth and breadth of the different types of ABL that we have expertise in, from factoring receivables, both on a recourse and non-recourse basis, to inventory heavy with some A/R. We have significant healthcare ABL expertise through a long tenured team dedicated to that niche. They know the ins and outs of advancing loans against government and commercial payor receivables. This skillset is complemented by the expertise of our life science venture lending and our healthcare cash flow lending teams. Additionally, our strong sponsor relationships, through our cash flow lending business, provide us with opportunities to structure asset-based loans for sponsors’ portfolio companies, who have traditionally sought financing in the cash flow loan market and are in need of unlocking additional liquidity by leveraging their assets. We have a soup-to-nuts type of ABL offering. We also have an equipment finance group that we can lean into at times to look at values associated with machinery and equipment collateral when it comes to middle-market companies. So, we can really offer a lot of different products to our borrowers and provide a full financing package to solve their needs.

Fowle: SLR offers an ABL product set that rivals that of any bank, but it's on a private credit platform, which is why this opportunity was so attractive to me. At SLR, we can provide a traditional ABL revolver, a large FILO term loan or something in between. I think having a broad-based equipment finance offering, the infrastructure to be able to factor receivables, and long-standing expertise in industries such as healthcare, which is a very nuanced market, and niches like digital media and ad tech is a real differentiator.

What are your top priorities in your new role?

Fowle: I think I have a skill set and a background that is a great complement to a very deep and established team across the various finance companies that are on the SLR platform.  I’m partnering with them to figure out, as we move through this ever-evolving macro landscape, how to bring that combined experience together to further scale the platform. That is what I'm most focused on out of the gate. As with any new opportunity, I’m concentrating on really getting to know the people. That is an important place to start. There is a fantastic culture here with a strong foundation and it’s critically important to understand that and get into the flow of things.

Henley: The addition of Mac and his background in ABL to the existing SLR ABL foundation is an incredibly exciting one for us. He's hitting the ground sprinting, not running, and he blends in well with SLR. In finance, people are your biggest asset. He has a great leg up and speaks to ABL and knows our product set extremely well. So far, it's been awesome.

You touched on culture. Are you in-person at SLR? 

Cedric: We are. I’m of a generation of working in the office, and believe mentoring younger people is really important, and especially important in ABL. I think that the ability to do that in a remote environment is, in my opinion, not an effective option. The better way is to meet face to face and have the ability for junior and mid-level people to come in and talk to folks like Mac and myself who have been doing this for 30-plus years.

Fowle: I agree. We've learned to benefit from having access to better technology that makes it easier for us to do our jobs when they're on the road. But from a mentorship and a culture perspective, there's nothing that can duplicate what you get from being in the office and collaborate with the people that you work with. That's a shared value that I have with Cedric and the rest of the leadership here at SLR. I come from a large bank background where there was never an issue with having access to resources and people. And certainly, there was a priority and an emphasis on training and mentorship. That's something that I look to bring into this role as well, because I think it's incumbent upon all of us as being good stewards to great businesses, to invest time in developing the next generation of leaders. That's something I'm very focused on in this role.

How do you plan to expand SLR's ABL capabilities?

Fowle: There is an exceptionally strong platform that's in place, and it doesn't feel like there are any pockets of the market that aren't currently covered by SLR. Private credit can provide more flexible financing as companies are going through transition, and I believe that we can leverage the platform to go after white space that is not currently being addressed by banks, especially given how fragmented the ABL market is. I do have a slightly different background, and with that comes a lot of relationships that that I've built over the years, and so I’m looking to leverage those relationships for the benefit of SLR going forward. So, I think that's a priority as I'm working with the team, getting to know them better, and identifying other areas for opportunity. As the market continues to evolve, we are looking at how our product set in and around ABL can evolve to meet the needs that borrowers have today.  We've got the platform to do it, but it's constantly evolving, and my job and what I'm being brought in here to do, is to anticipate the direction of travel and how to pivot SLR to be the first call for borrowers, sponsors, and intermediaries when they have a complex structured asset-based solution.

How will you balance growth objectives with maintaining disciplined underwriting and asset monitoring?

Fowle: I've always thought that the special sauce to ABL is the process that goes into how we underwrite the deals that we do and the infrastructure that you have around monitoring those credits on a go forward basis. One of the many things that jumped out to me as part of this process and getting to know the team at SLR was how exceptionally strong the culture was around risk management. That’s paramount to everything that we do. We speak the same language in that regard. There are plenty of opportunities to bring that ABL structured discipline, anchored around high-quality assets, to be able to help businesses grow. I don't think that there's any need to compromise the blocking and tackling that has gone into making this business so great in order to be able to grow. That's a tenet to how we think about doing things. It’s all going to be anchored around smart, prudent risk management.

I’ll also add that from the very top of the house, everybody is on the same page with the commitment to ABL. I think that is very unique. There's a ton of people that want to get into this space. SLR’s most experienced ABL leaders have been in this industry for nearly 4 decades. The managing partners understand it, and there's a clear direction with where we're going and ABL is a big part of that. To be brought into a leadership role with everybody on the same page is another one of those things that makes this such a great fit and exciting opportunity.