BMO and Canal Road Group Establish a Significant Lending Partnership for Mid-Market Companies

BMO and Canal Road Group Form Strategic Partnership

On January 10, 2025, BMO Financial Group, one of North America's top banks, announced a strategic partnership with Canal Road Group (CRG) aimed at enhancing direct lending capabilities for upper middle-market companies. As part of this collaboration, BMO commits to providing CRG with up to $1 billion in capital, facilitating a robust direct lending strategy tailored for corporate clients.

CRG, an alternative asset manager, specializes in sourcing, underwriting, and managing portfolios of senior secured corporate debt investments, primarily within North America. This partnership is positioned to significantly augment the access of corporate and sponsor clients to private lending capital, with a primary focus on critical transactions needing financial backing. BMO's established banking relationships and expertise in capital markets will supplement CRG's investment management capabilities, creating a potent financial entity.

In an official statement, Alan Tannenbaum, CEO and Group Head of BMO Capital Markets, expressed enthusiasm for this collaboration. He noted that the partnership enables both institutions to combine their strengths, providing an array of innovative financing solutions that cater specifically to shifting client needs and strategic goals. Tannenbaum remarked, "This exciting project brings BMO together with CRG to offer a full suite of innovative, private financing solutions to our clients."

Similarly, CRG's leadership shared optimism about the mutual benefits of this partnership. With increased access to capital and deal flow, along with BMO's expansive network of client relationships, CRG anticipates a significant enhancement in its operational capacity. As financial markets evolve, this alliance is expected to better address the growing demand for customized lending solutions in a dynamic marketplace.

BMO's commitment, which includes a non-voting minority stake in CRG’s management company, is a testament to its confidence in CRG's approach and its team, which consists of veterans from the previously successful CBAM Partners credit platform. Founded by industry experts Don Young and Mike Damaso, CRG's established team aims to leverage their previous success and deep market understanding to drive substantial growth within this burgeoning partnership.

Through this strategic relationship, BMO and CRG are aligned on a shared vision: to redefine direct lending for upper middle-market companies by enhancing accessibility to essential financial resources. By merging BMO's expansive reach and capital markets expertise with CRG’s specialized investment strategies, clients will benefit from bespoke financing solutions designed to meet their unique operational challenges.

As CRG grows its portfolio and extends its service offerings, clients can expect tailored solutions that resonate with their goals, ultimately fostering business growth and innovation. This partnership signifies a turning point in the financial landscape, heralding a new era of collaborative financing initiatives poised to make significant impacts across sectors.

In conclusion, the collaboration between BMO and Canal Road Group marks an exciting development in direct lending, one that promises to empower businesses with the necessary capital resources for thriving in today's complex market environment. Through this strategic partnership, both institutions are committed to delivering substantial value to their clients while fostering financial growth and stability in the upper middle-market sector.