Charleston Regional Development Alliance

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Boston financial services firm opens Southeast office in Charleston region

Jul. 1, 2005
Charleston Regional Business Journal
By Matthew French
NewStar Financial Inc., a year-old financial services company headquartered in Boston, had been searching for a location to establish its Southeast U.S. office. After surveying several cities, including business and banking centers such as Atlanta and Charlotte, company executives chose the Holy City as its ideal location.

“We want to be in several locations and had been looking at the Southeast for a while,” says chief executive officer Tim Conway. “Our strategy in building out is not necessarily to be in the biggest cities but to be in the best location for us to be able to attract people to come to work.”

The office, which opened in June, is currently a one-man show, being run by financial services veteran Bob Kosian, who has previous experience with both Citigroup and Prudential Securities. Kosian was also a fund manager with the Charleston Digital Corridor Fund, which is used as collateral for business loans to companies being targeted for recruitment and growth by the corridor. He was the chairman and CEO of High Voltage Holdings, a boutique merchant bank, and a senior advisor to Founders Equity, a New York-based investment fund. He has completed more than 200 transactions representing more than $20 billion.

NewStar provides financing solutions to mid-sized customers in the commercial real estate, middle market corporate and structured products markets. Since its launch in July 2004, the company has completed more than 35 transactions. The company will continue to focus on the middle market and leveraged buyouts, Kosian says.

NewStar plans to expand locally by a handful of full-time employees. The company has billions of dollars in the Southeast into which it can tap, he says.

“There’s about $20 billion in committed capital in about 200 different funds in the Southeast,” Kosian says. “We’re certainly not going to go after all of it. Our firm is much more modest at the moment. We originate a little less than $500 million in assets, but we’re trying to get our monthly new business up to about $100 million per month.”

Kosian is looking for people with solid financial backgrounds to get a committed pool of capital, which comes mostly from pension funds and institutional investments.

“The Southeast region this office will cover ranges really from Washington, D.C., to Miami, and Charleston is right in the middle,” he says. “It’s got good airport access to anywhere I need to go, and I was already living here. Atlanta doesn’t have that many leveraged buyout sponsors; plus it doesn’t matter so much where the office is actually located because you tend to travel so much in this job.”

The Charleston office, located on Calhoun Street, is the fourth of NewStar’s locations, the others being Boston, Manhattan and Fairfield, Conn. Conway says further expansion will take the company into the Midwest—likely Chicago—and a location to be determined on the West Coast. Conway says he looked at other regions in the Southeast for about three months before deciding, and the fact that Kosian was already here made the decision that much easier.

“As our company continues to grow and thrive, expanding our presence into the Southeast makes perfect business sense,” he says. “We are certain there is a demand for NewStar’s expertise, flexibility and resources throughout the region and every bit as confident in our ability to meet that demand.”
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