By Eileen Wubbe
David Wisen is the CEO and co-founder of Wingspire Capital, a diversified senior secured finance company focused on originating asset-based and specialty finance loans to middle market businesses in the U.S. Transaction sizes range from $20 million to $200 million, and proceeds are used to finance growth, M&A, dividend recapitalizations, restructurings, and turnarounds. Wingspire is a portfolio company of Owl Rock Capital Corporation (NYSE: ORCC). Here, Wisen discusses Wingspire’s first two years, leading through COVID, new talent coming on board, its relationship with Blue Owl Capital and plans for the next several years.
TSL: Wingspire has been bringing on a lot of talent, especially during the past few months. Can you speak more about the specific skillsets new team members are bringing to the company?
David Wisen: Wingspire is in the good position of having ample permanent capital and investors with a long-term view. Therefore, the key to our success will be hiring the right people and putting them together effectively as a team. The hiring plan is a foundational element for us. This is our second year. In our first year, we hired to build the infrastructure for the company, including a head of originations, chief credit officer, all of the basic pillars and we filled out accordingly. This year is about filling specific gaps, or, as the business has evolved, we realize we need to bolster certain areas.
So, it’s a very different hiring phase for us now. For example, we’re doing more term lending, so we’re looking to hire equipment finance people. Likewise, we are doing larger transactions, so you may have seen a recent announcement about bringing on a head of capital markets. Most importantly, our message to the market is resonating, so we’re growing and we need to add underwriters and portfolio managers. Each of these things is kind of a rifle shot to fill a need or to bolster an existing capability.
TSL: What do you specifically look for when you’re hiring?
Wisen: This is the special sauce, and it’s hard. We take this extremely seriously, as everybody says they do. The most important things for us are character, subject matter expertise and compatible working style. Your subject matter expertise is not something to take for granted, but we view it as table stakes. We aspire to excellence in what we do in the product we deliver to our customers, so we need people who know the product, have been there before or can learn. We view that as table stakes.
Culture is really what enables success. That’s really important to us. We think having the right culture is what will enable us to succeed in the long-term. We want people who are going to do the right thing, treat each other well and treat the customer well, but, importantly, we also want compatible working styles.
We have a flat structure, so in order for us to succeed, we need people that are really self-directed, willing to roll up their sleeves, help a colleague. We want people who are passionate, who are willing to argue pros and cons about investments, who can disagree in a collegial atmosphere. Everybody has a voice, but you need to be comfortable stepping up to the mic to share that voice. Those are things that we look for because we don’t have a traditional pyramid structure at the company.
TSL: At SFNet’s YoPro Virtual Conference in August 2020, you mentioned Wingspire was operating in COVID longer than during pre-COVID and you were on-boarding and building company culture virtually. Are employees back in the office again, either with a hybrid format or full time? If so, how has the transition been?
Wisen: I’m so happy to be able to answer this question. After the last time we spoke, it’s such a relief to see the light at the end of the tunnel and be able to really get back to this. So, I’m genuinely excited about this transition but, it is a transition. We have 16 people, and some of us have not met others ever in person, which is crazy, but that’s the reality. We have learned a lot during COVID and one thing for sure is that we will remain in a hybrid work from home and in-person office format.
Our largest office is in Atlanta, and that office has been open for quite some time, but the people in Atlanta decide whether they want to work in the office on any given day. It’s up to them. We have not yet told people in New York, Boston or Chicago to go into the office.
We generally want people to have agency over their lives and the work that they do. We try to communicate clearly what’s expected. Everybody knows what needs to be done, and if you could get the job done by working from home that day because you have a doctor’s appointment or you have to go to your kid’s school or something like that, and the job gets done and it’s more efficient and better for you in your life than it was pre-COVID, then we see no reason to change that.
So, it’s really that balance based on the person and where we are. If we’re trying to close a deal, the answer will be different. Me? I’m totally psyched to go into the office every day! I miss it, but we’re going to keep the hybrid format for the foreseeable future.
TSL: What have you learned in leading Wingspire through COVID, and as the country continues to come out of the pandemic?
Wisen: I think what COVID did was amplify or highlight leadership elements and important ways to organize people and manage people. It didn’t change my views on leadership, it just amplified it and really put a light on top of it.
So, in COVID, what you really needed to do was to make sure you had your direction in place and clearly stated, hire good people, communicate what the goals were, get the obstacles out of the way and hold people accountable. That was true pre-COVID, and it was especially true during COVID. If I had to point to any specific things COVID meant, it’s that there was less room for mistakes.
I think a higher premium was put on effective communication. When everybody is remote there’s eye contact on video conferences, but there’s no body language. Communicate, communicate, communicate when you’re not together.
I think empathy was also important as part of a leadership style, to realize that people were experiencing the pandemic in different ways and you had to understand that. But, along with that is accountability. We did well during COVID because people were accountable to each other.
TSL: Can you tell us a little bit more about Wingspire’s relationship with Owl Rock Capital and Blue Owl Capital?
Wisen: Wingspire is a portfolio company of Owl Rock Capital Corporation, which is the second largest publicly traded business development company. ORCC is externally managed by Owl Rock Capital Advisors. Wingspire operates independently from ORCC, but we exchange best practices. We also occasionally confer, for example, where there may be a private equity firm that has a portfolio company that needs an alternative liquidity solution. The sponsor may not be sure if something is a cash-flow loan, an asset-based loan, or a combination. With Wingspire involved, we’re able to collectively bring expertise to help the client consider various forms of financing so that it can then choose whichever path is best.
Recently, Blue Owl Capital was formed as the result of the merger between Owl Rock Capital Advisors and Dyal Capital Partners. Blue Owl has approximately $52.5 billion of assets under management as of March 31, 2021. This was a blockbuster transaction that has the potential to create tremendous opportunities for Wingspire. Our working environment hasn’t changed at all at Wingspire, but the potential opportunities have expanded. The people who run Blue Owl are great at what they do so everyone at Wingspire is excited for what may lie ahead. Importantly, Blue Owl shares the same values and emphasis on culture as we do at Wingspire, so that has helped.
TSL: Can you discuss Wingspire’s flexible mandate with regards to structure?
Wisen: At Wingspire, we have the benefit of permanent capital with a long-term outlook so we can be flexible when we structure loans to create the best, smartest loan for the situation. Certain other investors in finance companies want to build a company and then sell it within a defined period of time. Other investors in finance companies have only one type of capital. We don’t have those constraints. Whether we offer a revolving asset-based loan or an equipment term loan, or a real estate term loan — it doesn’t matter. We just want it to be a smart loan that works for the client and meets our investment criteria. What we care about is predictable returns and appropriate yield with limited volatility, and we can make various types of loans to achieve those results. We have the ability to look at a situation and say, ‘We should do a revolving loan secured by working capital, but also a term loan secured by equipment, and a term loan secured by real estate.’ We can do all that if it’s smart. There are other firms that can’t do that. Our capital just wants us to do a good job. They’re agnostic as to the form of the loan as long as it’s a smart loan.
TSL: Can you elaborate on how you approach a deal in front of you and have gotten creative?
Wisen: Sure. All the companies that we compete with are great firms with great people, but the reality in most industries is you grow up doing something. You know the expression: If you’re a hammer then everything looks like a nail. Lending is like that. You can have a situation and somebody is traditionally an asset-based lender, meaning they provide working capital loans secured by receivables or inventory, and that’s what they look for in a situation. When we started Wingspire, we purposely approached it from the perspective of the customer. They just want capital that helps them grow their business. They’re less focused on which bucket you put it in.
I brought my background to Wingspire and said a company may benefit from a solution that brings together all these different elements. With that background, we’ve trained our folks to step back and think more holistically. Don’t think about what we can’t do because it’s not our product, but instead ask what a smart, thoughtful lender would do, regardless of the type of loan.
This goes back to your question about flexible capital. Just having the capital to do that isn’t enough, you need professionals who can think and look for that. A couple members of our senior team at Wingspire are very comfortable with that. So, in our early going, we had to emphasize to the folks on the frontline to take the blinders off, think about the big picture and think about what’s a good loan regardless of the name you put on it.
TSL: What are your goals for the next few years for Wingspire?
Wisen: We’re going to grow and diversify. We’re going to keep adding good people and we’ll probably launch a couple of industry-focused verticals. We’ll continue to do more term lending, such as equipment finance.
We have a long-term plan with Owl Rock. The capital here is permanent in nature so we have the luxury of trying to build for the long term. We have to succeed today, obviously, but we’re not making our choices simply for the P&L today. We’re doing everything with an eye cast towards where we want to be three years from now, five years from now. And that’s all about attracting or retaining the best people, diversifying our products, getting into new industries and growing effectively.
TSL: When you’re not busy at Wingspire, what can you be found doing?
Wisen: I like to exercise. I also like to read a lot. I wish I could tell you I was a mountain climber or something interesting like that, but I’d be lying.
Travel’s a big one too, which, of course, during COVID, we weren’t able to do. I’m super psyched to be able to get back out there to travel. I’ve been to some great places. We had a great trip to Argentina. We went to Patagonia, saw glaciers and penguins. I’ve been to France probably 15 times because we lived in Luxembourg for two years. I love everywhere because every place can teach you something different. You try different foods and see beautiful things.
Iceland was cool, too. I went snorkeling there. There’s a place in Iceland where the North American and Europe continents touch, and there’s a glacial stream that’s very deep. If you snorkel or scuba dive there, there are spots where you can touch two continents — one on your left hand and one on your right hand. That water was super cold so it’s not something for the faint of heart, but that was really fun.