BMO, Canal Road Group Partner on $1B Direct Lending Strategy

BMO Financial Group and alternative asset manager Canal Road Group (CRG) have entered into a strategic partnership that will enable CRG to invest up to $1 billion in capital for the firm’s direct lending strategy for upper middle market companies.

CRG specializes in originating, underwriting, and managing portfolios of senior secured corporate debt investments for companies in North America sourced largely from sponsors.

The partnership will combine BMO’s banking client reach, origination, and capital markets expertise with CRG’s growing capital base and investment management. BMO will also benefit from access to CRG’s network of borrowers, lenders, sponsors, and management teams and anticipates providing credit facilities to CRG’s strategy over the long-term. As part of the arrangement, BMO will hold a non-voting minority stake in CRG’s management company.

“By leveraging BMO’s robust banking, capital markets and sponsor finance platforms alongside CRG’s expanding capital resources, clients will have access to the full array of financing solutions tailored to support their evolving needs and strategic objectives,” said Alan Tannenbaum, CEO & group head, BMO Capital Markets.

Miami-based Canal Road Group was founded by Don Young and Mike Damaso, who previously led $15 billion credit platform CBAM Partners, which was subsequently sold to Carlyle in the spring of 2022.