In November 2019, Wingspire Capital Holdings (Wingspire) announced its official launch as an independent diversified direct lender focused on providing asset-based loans and related senior secured loans to U.S.-based middle-market borrowers.

Based in Atlanta, Wingspire focuses on the upper tier of the senior secured asset-based lending (ABL) market by providing senior secured revolving credit lines and term loans ranging in size from $20 million to $200 million. Wingspire is a portfolio company of Owl Rock Capital Corporation, and is led by David Wisen, Founder and Chief Executive Officer. Wisen is a 25-year commercial finance industry veteran who previously served as Group President of Textron Financial Corp.

In the following interview with ABL Advisor, Wisen shares his insights into what it takes to successfully start a new commercial finance company focused on the asset-based lending sector, the impact of the COVID-19 pandemic on this new entrant to the lending market, Wingspire’s vision for long-term success in a highly competitive lending landscape, and the relationship between Wingspire and Owl Rock Capital Corporation.

As we have all witnessed over the past few years, independent commercial lenders have emerged as significant players in the asset-based lending industry, challenging banks in the race for loan volume. While these independents may have a unique value proposition, like any lender their success is dependent upon understanding the market and building a plan that can be effectively executed to compete among the many types and sizes of lenders in the space. And this has been top-of-mind for Wisen and his leadership team.

“The launch of Wingspire was an exciting experience for all of us,” says Wisen. “We believe deeply in the business plan we’ve developed and in the vision for our company. Additionally, our team trusts each other, and we are confident in the strength and future of Owl Rock.”

But launching a new lending company takes more than creating a strong business plan and vision. Ultimately, execution is critical to long-term success, according to Wisen.

“The challenges are all about execution,” says Wisen. “Establishing our brand in the market and creating an awareness of who we are, implementing the right systems and processes, and establishing a culture that will facilitate excellence and continue to attract the best people was  of paramount importance to us.”

Not long after launching Wingspire, the world changed seemingly overnight resulting from the COVID-19 pandemic, which has had a significant impact on borrowers and lenders alike. For a new entrant just getting started in the market, these unexpected challenges can be even more daunting. For Wisen and his team, their primary concern when the virus first emerged was the health and well-being of their community – their team members, families, customers, advisors and investors. “Our primary concern was, and remains, everyone’s health and well-being. The COVID-19 pandemic has caused significant upheaval, loss and uncertainty on a scale not seen in most of our lifetimes, and we are very aware of how that unique and unforeseen event is impacting everyone. We have tried to be thoughtful and considerate of how we can help our team members survive in this environment, and we also are working to support our communities during this pandemic. We have dedicated a great deal of time and resources to be a positive source of strength either directly or via the many community efforts sponsored by Owl Rock,” says Wisen.

From a purely business perspective, the main challenge presented by COVID-19 was uncertainty not only for Wingspire, but many commercial lenders as circumstances were evolving rapidly and no one understood what may lay ahead. As a result, Wingspire assessed its approach to risk management from the onset of the crisis.

According to Wisen, “Since credit decisions are mostly an assessment of future risk, this uncertainty required us to think differently about the underwriting process and give closer consideration to possible worst-case revenue scenarios for borrowers’ business plans.”

But while much remains unclear about the future trajectory of the pandemic and its long-term economic consequences, COVID-19 has not caused Wingspire to change its overall business strategy according to Wisen.

“If anything, the depressed economic activity has created an even more compelling need for what Wingspire provides in the market – which is thoughtful asset-based lending. Wingspire was built with a late-cycle mindset, designed from the beginning to be a positive and effective source of capital during an economic downturn. Of course, no one anticipated or wished for such a fundamental calamity, but we were prepared when it occurred.  We have a cycle-tested team and we benefit from Owl Rock’s large and permanent capital base. This is a very powerful combination and we are already seeing a significant increase in demand for our loan products.”

A Consistent and Long-Term Vision

To achieve long-term success, a lender ultimately needs to establish its strategy to effectively compete in today’s market. And while the COVID-19 pandemic may have impacted some lenders’ approach to the market, Wingspire’s go-to-market strategy has not wavered.

“Wingspire offers holistic liquidity solutions to middle-market companies, assessing both cash flow and all forms of collateral,” says Wisen. He continued, “Our job is to make well-structured loans and to realize an appropriate risk-adjusted return for our investors, and to do so consistently and over the long term. ‘Consistently’ and ‘long term’ are the key words for Wingspire.”

Differentiation among a seemingly crowded field is also important and, according to Wisen, his team is well-prepared to provide unique and creative financing solutions to borrowers. “We differentiate ourselves from our competitors with flexible liquidity solutions and a primary focus on the customer. We take the time to craft financing solutions that are not always obvious. We can do this because we have a highly experienced team that has excelled in multiple forms of lending and has the energy and desire to find the right answer for the borrower. And we care deeply about the customer experience. That’s how you win over the long term in this business – by having the best people who will listen to different points of view and make decisions as if it is their own money.”

Building the Right Team

Since launching, Wingspire has made several strategic hires – including both bank and non-bank seasoned professionals. This mix of lending professionals provides Wingspire’s team a diverse set of skills, a mix that Wisen believes creates a high energy learning environment where everyone on the team is focused on the transaction and the customer.

“We are blessed to have assembled a team of all-stars hailing from fantastic firms such as Wells Fargo Foothill, CIT Group, Textron Financial and Midcap. The number one characteristic we seek in our people is strong character because we know that success and excellence can only flow from this first premise. Beyond that, we consciously sought people with diverse lending experience, not just ABL but also professionals that are comfortable with equipment, cash flow and real estate lending. We are blending seasoned professionals who fought the battles during the Great Recession with younger high potential professionals who came of age in a more sponsor-driven lending environment,” says Wisen.

Finding Footing in a Unique Economy

While economists often seem to agree to disagree, lenders must focus on how to succeed in this “new normal” and it will be incumbent upon all lenders to find their footing in their market. Wisen believes there will be significant opportunities for growth as we enter the second half of 2020.

“Historically, ABL products have done well during economic downturns as borrowers and sponsors seek alternative forms of liquidity,” says Wisen. “Not only can ABLs be a good solution for a middle-market company, but the data proves that ABLs experience very low losses even during the worst economic downturns, so these loans are also an attractive form of credit exposure for institutional investors. Although every cycle is different, we believe that the back half of 2020 and the first half of 2021 will present opportunities for well-capitalized, well-managed ABL lenders.

Finding the Best Partner

Finding the right partner was also critical to the long-term success of Wingspire and, according to Wisen, Owl Rock Capital Corporation is a perfect fit. “Wingspire is a portfolio company of Owl Rock Capital Corporation. We operate independently with our own credit approval and other authorities and adhere to best-in-class governance standards. Our culture and values align perfectly with those of Owl Rock and so we have a fantastic working relationship.”