Hillmount Capital recently marked 15 years in private lending. In conversation with Yitz Levinson, President and Founder, he offered the following thoughts on the firm’s achievements.
How did Hillmount Capital get its start?
Prior to founding Hillmount Capital, I worked in Ernst & Young’s corporate restructuring group, where I attained deal experience through workouts and debt financing engagements. If you understand how things can go wrong, it makes you better able to structure successful transactions that might not be bankable otherwise. When I saw that I could fill a need in the private lending space, that led to forming Hillmount Capital.
This year marks 15 years for Hillmount Capital. How do you account for your success to date?
The past 15 years have seen some profound cycles in the credit sector and we’ve needed to be adaptable to markets and opportunities. And yes, our assets under administration have grown significantly, but it’s been in lockstep with our bench strength and our lending capabilities. We’ve developed a multi-disciplinary management team with expertise in finance, insolvency, debt restructuring, and real estate, but we’re still small enough to be entrepreneurial. We’re collaborative, both internally and with our clients which creates opportunity for us to improve at different levels.
Our brokers know that we want to work with them and that we offer flexibility to help the borrower achieve their goals. At the end of the day, we’ve been successful because of the confidence our network has in us. That’s really important in our sector since subprime lenders have taken their lumps in the past. We need to maintain our reputation, which is based on integrity and trust.
How do you maintain trust in your market?
We typically work with mortgage brokers, accountants, and lawyers. We respect the referral relationship and put the borrower first so that our network feels comfortable connecting them with us. Trust comes down to keeping your word—when we make a commitment, they need to know that we will complete the deal on the same terms and do it promptly. When we have the information we need, we’re able to turn around a commitment in as quickly as 24 hours.
How do you distinguish yourselves from other lenders as the market becomes more competitive?
Trust is key, but we also excel in our creativity—we find ways to execute deals that others can’t, drawing on our background in restructuring and accounting. We’re able to do some very complex transactions by tapping collateral sources of cash flow and security that more conventional and private lenders might overlook.
We recently rebranded to show our network that we have a stake in this business and a vision for ourselves in the landscape. The rebranding helped define and manifest that vision as we continue to evolve as part of our growth.
And on the funding side?
Meeting our commitments obviously depends on reliable funding sources and we pride ourselves on the fact that we have a fund and an investor base that allows us to make decisions almost immediately. Our philosophy is not to chase deals based only on interest rates, which has required a lot of discipline as markets become more competitive and less stable. Instead, we concentrate on the preservation of capital over rates, since it’s the risk-reward balance that protects portfolio quality.
What does the future hold for Hillmount Capital?
Credit markets have experienced a lot of volatility in recent times and we can’t be complacent. We need to be cautious, but also agile and open to new opportunities. The key for us is meeting the needs of those we depend on. For our clients, it means being reliable and responsive. It also means being innovative with our lending solutions—that’s how we add value to our relationships rather than just being a commodity lender. Our solutions have expanded to include a number of alternative financing options, including DIP loans, real estate workout financings and trustee certificates, in addition to our more traditional mortgage lending. For our investors, in turn, that helps us ensure investment opportunity, risk-adjusted returns, and security of capital.
Ultimately, it’s all good for the borrower. We tend to see every deal like a restructuring situation—we try to bridge every borrower to the point where they can establish the creditworthiness they need to move on to an institutional dealer or a sale if the institutional financing can’t happen.
Markets may change, but if we stick to our principles, we will be in good stead for the next 15 years.