Early in the New Year, San Francisco-based White Oak Global Advisors announced the launch of White Oak Healthcare Finance. The firm named healthcare industry veteran Isaac Soleimani to head the new vertical. Much like his new company’s namesake – the white oak (quercus alba) – Soleimani envisions his latest venture to be sturdy and strong; deeply rooted with regard to industry expertise; and long-lived by keeping a keen eye on long-term success in providing effective financing solutions to middle-market healthcare borrowers.

ABL Advisor readers are likely to remember Soleimani as the former chairman and chief executive officer of Healthcare Finance Group, but his connection to the healthcare sector reaches back some 30 years prior. He recalls, “I became involved with the healthcare sector in the mid-1980s when I was with Prudential Capital. I was looking at a number of asset classes and realized that the sector presented a great opportunity for healthcare providers to obtain cost-effective financing by using the credit of their payors – namely Medicare, Medicaid and highly rated insurance companies – even if their own credit rating wasn’t that great.”

This “untapped opportunity,” Soleimani explains, compelled him to further explore the healthcare market and in time, to develop and pioneer a broader array of products and financing methods for his clients. “I did this initially at Daiwa Securities America, where I ran the healthcare finance group. In 2000, I had the opportunity to buy out that business and that’s how I came to launch Healthcare Finance Group.”

In 2013, Soleimani sold Healthcare Finance Group to Fifth Street Finance Corp., which only last June, then sold the HFG portfolio to MidCap Financial, the asset-based lending platform of Apollo Capital Management.

It was perhaps at HFG that Soleimani developed his fundamental approach to financing middle-market healthcare borrowers. He explains, “One thing I learned a long time ago was that you have to look to the long term and build a business that can navigate through all kinds of cycles.”

This points to one immutable fact: All businesses experience cycles and Soleimani underscores that healthcare is no exception. He explains, “There have been times during which funding for healthcare has been abundant and other times where access to financing was the opposite. For example, in the late 1990s, we went through a cycle where many providers went bankrupt due to the Balanced Budget Amendment Act.” It was at that time, he further points out, that six or seven out of eight public nursing homes filed for bankruptcy resulting from cuts at the federal and state levels.

“There are regulatory cycles and of course, economic cycles such as the meltdown that began in 2008. While many of our competitors couldn’t survive during the most recent recession, we withstood the test and in time, we were able to resume our growth and sell the company.”

We asked Soleimani to comment as to what attracted him to the opportunity to launch the healthcare vertical at White Oak Global Advisors. He says, “I had been looking at several segments as well as platforms-- both in and out of healthcare – to start something novel. Ultimately I came to the realization that in the middle-market healthcare space, a real void still exists. Considering my domain expertise, I thought this is where I could add the greatest value.”

With his mind set – or in this instance reset – on the healthcare sector, Soleimani welcomed the chance to find out more about White Oak. “In the end, it really boils down to three main things in the financial services business: people, track record and capital. The people at White Oak are really first rate … talented, professional, and experienced. Their track record is excellent as well. As far as their capital, White Oak has reached a level where they are growing and the firm has enough capital for me to grow this business to the levels that I envision. I felt these factors made joining White Oak the right place to launch something new.”

As for Soleimani’s vision for the business, White Oak Healthcare Finance is seeking to close transactions between $10 million and $100 million for providers that post annual revenues of $40 million to $1 billion. He says, “We’re looking to finance service providers that are both facility-based and non-facility-based including hospitals, skilled nursing centers, home health companies, laboratory companies and companies providing services to healthcare service providers.” He adds, “Simply said, anything that gets reimbursed.”

Given White Oak’s existing infrastructure, Soleimani is primed and ready for business. “We can tap into White Oak’s origination, underwriting and monitoring platform today. Interestingly enough, White Oak has closed healthcare deals in the past, but as generalists. I’m here to provide the healthcare-specific expertise that’s needed to grow the portfolio.

“The best part of this is we have already been shown deals from existing channels and origination sources that White Oak has been dealing with. This is a well-oiled machine that has been performing very well and we are looking to have professionals join us very quickly … and we’ll continue to build our team from there.”

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