Announcing the Formation of Varagon Capital Partners: A New Asset Manager Serving Middle Market Borrowers and Investors

Varagon Capital Partners (Varagon) announced today its formation as an asset manager focused on direct lending to middle market companies.

Varagon is an independent firm, backed by American International Group, Inc. (NYSE: AIG) and by certain partners and affiliates of Oak Hill Capital Management (Oak Hill), and launches with an initial $1.5 billion investment commitment from AIG.

For investors, Varagon offers a superior means to invest in middle market credit, providing tailored investment services that meet the needs of sophisticated institutions. Varagon couples information transparency and flexible investment mandates with robust risk management to create a differentiated proposition for investors. These investors, with a desire to hold quality middle market loans to maturity, are a natural source of capital for Varagon’s borrowers.

For borrowers, Varagon’s model is relationship-based and industry-focused, built around a deep understanding of its customers’ businesses and financing needs. A broad investment mandate allows Varagon to offer competitive first-lien, unitranche and second-lien loans, as well as mezzanine financing, to companies with $10 million to $75 million of EBITDA. Varagon targets leveraged finance opportunities of up to $350 million and has a typical hold size of $20 million to $100 million.

Varagon is led by industry leaders and a veteran Board of Directors. Varagon’s CEO, Walter Owens, is an experienced middle market finance executive who has held leadership positions at GE Capital, CIT Group, and TD Bank. “Varagon’s versatile product suite creates a ‘one-stop’ financing solution for borrowers,” said Owens. “Varagon’s investors have a broad appetite for attractive risk-adjusted returns, allowing Varagon to offer competitive financing solutions up and down the capital structure.”

Denis Nayden, a Managing Partner of Oak Hill and former Chairman and CEO of GE Capital, serves as the Chairman of Varagon’s Board of Directors. Varagon’s Board also includes independent directors with significant industry expertise. Michael Gaudino, former CEO of GE Corporate Financial Services, and Morris W. Offit, Chairman of Offit Capital, both serve on Varagon’s Board of Directors.

“Varagon developed from our belief that there is an opportunity to better serve both borrowers and investors in the middle market,” said Denis Nayden. “Varagon offers investors a superior means to invest in middle market credit, providing highly attractive risk-adjusted returns through tailored, transparent investment solutions.”

“We are excited about the opportunity to partner with Varagon,” said Brian Schreiber, Deputy Chief Investment Officer of AIG and a member of Varagon’s Board of Directors. “As a long-term investor, AIG is drawn to the strong fundamentals of the middle market opportunity. Varagon offers sophisticated investors clear, attractive, and flexible exposure to high quality, directly-originated assets with best-in-class risk management.”

Varagon Capital Partners is headquartered in New York.

About Varagon Capital Partners

Varagon Capital Partners is an asset manager focused on direct lending to middle market companies. Varagon offers investors a superior means to invest in middle market credit, providing tailored investment services that meet the needs of sophisticated institutions. Varagon creates lasting partnerships with middle market companies and financial sponsors by delivering innovative, flexible financing solutions across the capital structure.

About Oak Hill Capital Management

Oak Hill Capital Management is a private equity firm managing funds with more than $8 billion of initial capital commitments from leading entrepreneurs, endowments, foundations, corporations, pension funds, and global financial institutions. Since inception 28 years ago, the professionals at Oak Hill Capital and its predecessors have invested in more than 70 significant private equity transactions across broad segments of the U.S. and global economies. Oak Hill Capital applies an industry-focused, theme-based approach to investing in the following sectors: Consumer, Retail & Distribution; Industrials; Media & Communications; and Services. Oak Hill Capital works actively in partnership with management to implement strategic and operational initiatives to create franchise value.

About American International Group

American International Group, Inc. (AIG) is a leading international insurance organization serving customers in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional, and individual customers through one of the most extensive worldwide property-casualty networks of any insurer. In addition, AIG companies are leading providers of life insurance and retirement services in the United States. AIG common stock is listed on the New York Stock Exchange and the Tokyo Stock Exchange.