Mid-market commercial direct lender Newstar Financial is losing one of its founding members and a key figure in establishing its multi-faceted securitization platform with the announced retirement of treasurer and asset management head John Frishkopf.
John Frischkopf is retiring effective Sept. 30, but will remain with the company in an external advisory role. His departure comes just two months after the retirement of another of company founder, chief investment officer and board member Peter Schmidt-Fellner.
Frishkopf has led the Boston-based NewStar’s asset management business since 2004, in a role that included leading the securitizations of its business loan originations in 13 collateralized loan obligation transactions. NewStar also launched asset-backed transactions supported by equipment leases and loans issued through its commercial lease business.
Frishkopf is to be replaced by treasury group managing director Michael Eisenstein, who has served as assistant treasurer since 2011 for NewStar (NASDAQ: NEWS).
"John played a key role in building the company and establishing our securitization platform as the centerpiece of our funding strategy,” said chief executive Tim Conway, in a statement. “His asset-liability strategy, disciplined liquidity management and thought leadership also helped guide us through periods of unprecedented market turbulence.”
NewStar Financial has $6.6 billion in assets under management, as it transitions away from its roots as a commercial finance company to build itself as a specialty direct middle-market lender and institutional investment management firm.
NewStar’s strategy is twofold. Its exit from mid-market commercial lending is an acknowledgement of the lower cost of funding banks and other competitors are bringing to the table, the company has stated. But it sees a higher-margin business in leveraged lending and asset-management services for speculative-grade companies, from which banks are slowly retreating under the duress of regulators’ leveraged-lending restrictions.
In March, the company sold its asset-based lending business to Sterling National Bank, a subsidiary of Sterling Bancorp.
Prior to arriving at NewStar in 2005, Eisenstein worked in the investment banking group of Bank of Tokyo Mitsubishi UFJ Capital Corp. His group covered non-investment grade commercial finance companies in the transportation sector.