Wells Fargo & Co. — nearly two years after starting a venture with Centerbridge Partners — is building out another new hook to the bank’s lending machine: offering loans to smaller private equity shops.
The bank has formed a mid-cap sponsor group in its commercial banking business, led by Tucker Sampson, the managing director spearheading the initiative who joined the firm last year from Bank of America Corp.
Lending to middle-market private equity shops, and in turn their portfolio companies, has been part of the tug of war between banks and private credit firms. Tighter regulations after the financial crisis caused some banks to pull back from the market.
But firms including Wells Fargo have also been seeking in recent years to get deeper into the business by looking for ways to work together with the nonbank lenders. In 2024, Wells Fargo launched a direct-lending venture with Centerbridge, called Overland Advantage. The business development company and Wells Fargo have put together more than $7 billion of deals since it started investing in late 2024.
The bank’s new mid-cap sponsors group will focus on cash flow-based financing on the bank’s balance sheet, often through priority revolvers and asset-based lending. It will also be able to tap Overland for private credit, which typically allows for more flexible payment schedules and higher leverage.
Sampson has built out the team with new hires including Jennifer Chen, who joined from Bank of America; Kevin Davidson, a 15-year veteran of Wells Fargo; and Hani Zabaneh, who held similar roles at Citizens Financial Group Inc. and JPMorgan Chase & Co.
Connecting with more private equity firms will also give the business a chance to funnel more opportunities to Wells Fargo’s investment banking operation, which the company has been building up in recent years. Sampson said the firm is already seeing some of those benefits.
“We can deliver every form of capital, which is really important to sponsors,” Sampson said in an interview. “And then we have a growing and very focused investment bank, which is something that we can deliver to sponsors as well.”
Wells Fargo had historically not had a presence in this corner of the market. When Mary Katherine DuBose, Wells Fargo’s head of specialized industries, reached out to Sampson about the opportunity, Sampson said he was curious about how the firm wanted to build its push into this market.
“To me, the opportunity was to build something unique to Wells, in order for it to fit within this growth platform,” Sampson said.
Written by: Yizhu Wang @Bloomberg
The post “Wells Fargo Deepens Private Equity Lending Push With New Team” first appeared on Bloomberg