In a recent fireside chat hosted by Giovanni Amodeo for ION Influencers, Ross Morrow, co-founder and executive director of DunPort Capital Management, delved into the intricacies of establishing a niche in European mid-market private lending. The discussion, rich with insights, spanned various topics including the evolution of DunPort Capital, market dynamics, and strategic growth.

Background and Formation of DunPort Capital: Morrow shared his journey, highlighting his extensive experience in leveraged finance and the establishment of DunPort Capital in 2017 alongside his business partner, Pat Walsh. The duo initially worked under BlueBay to create Ireland’s first private credit platform post-global financial crisis, deploying around €400 million in Ireland over three to four years.

Investor Engagement and Trust: Morrow discussed the pivotal role of maintaining strong relationships with initial investors such as the Irish sovereign wealth fund and various Irish pension funds, which were instrumental in supporting their spin-out from BlueBay.

Strategic Niche and Market Focus: The conversation shifted to DunPort’s strategic focus on the lower mid-market segment, particularly in Ireland, the UK, and the Benelux regions. Morrow emphasized the importance of this niche, given the concentration of capital in mid to upper-mid-market strategies by other entities over the past decade.

Banking Dynamics and Opportunities: Morrow outlined the evolving role of banks in Ireland and the UK from 2013 to 2024, noting the initial challenges post-financial crisis and the gradual recovery. He highlighted the unique positioning of DunPort Capital in not directly competing with banks but offering specialized products that cater to specific market needs.

Geographic Expansion and Market Coverage: The discussion also covered DunPort’s cautious approach to geographic expansion, ensuring they do not overextend themselves. Morrow detailed their methodical strategy in entering new markets like the Benelux, emphasizing the importance of understanding local market dynamics and maintaining a robust deal flow.

Investor Relations and Market Outreach: Morrow touched on the increased focus on marketing and investor relations, crucial for building the DunPort brand and ensuring sustained engagement with both investors and potential clients. He mentioned leveraging various platforms, including social media and industry conferences, to enhance visibility and connectivity.

Future Outlook and Technological Integration: Looking ahead, Morrow expressed optimism about the potential of technology to further streamline operations and improve efficiency within the firm. He anticipates continued reliance on technological advancements to support portfolio management and client engagement strategies.

In summary, Morrow provided a comprehensive overview of DunPort Capital’s strategic approach to carving a niche in European mid-market private lending, emphasizing the importance of investor relationships, market adaptability, and strategic growth. The insights shared in this fireside chat not only shed light on DunPort’s business model and market philosophy but also highlighted the broader trends influencing the private lending landscape in Europe.

Key timestamps:

00:09: Introduction to ION Influencers’ Fireside Chats
00:35: Background and Formation of DunPort Capital Management
02:09: Establishing Trust with Investors
03:23: Focusing on Niche Market in European Mid-Market Private Lending
05:05: Evolution of Banking Environment in Ireland and the UK
06:33: Competition and Market Dynamics in Ireland, the UK, and the Benelux
08:02: Origination and Marketing Strategy
09:48: Assessment of Addressable Market and Fund Size
11:42: Supply and Demand Imbalance in Lower Mid-Market
12:55: Definition of Coverage and Deal Selection
14:36: Expansion into New Geographies and Market Coverage
17:44: Geographic Growth and Investor Expectations
18:58: Relationship Between Fund Size and Geographic Reach
21:02: Marketing and Branding
22:28: Investor Relations and Concerns
25:55: Portfolio Performance and Communication
26:53: Challenges in Investment
27:49: Impact of Technology
28:39: Personal and Firm Leadership
29:14: Consistency in Strategy
30:00: Opportunities in Senior Unitranche