This week, we speak with Ken Kencel, who is president and chief executive officer of Churchill Asset Management, a private credit firm with $46 billion in assets under management that was the top US private equity lender in the 2022 PitchBook league tables and was named 2022 Lender Firm of the Year by The M&A Advisor. Churchill Asset Management is an affiliate of Nuveen, the $1.1 trillion asset-management arm of TIAA. Kencel, who has more than three decades of experience in the investment industry, also serves as chairman of the board, president, and CEO of Nuveen Churchill Direct Lending Inc., Churchill’s publicly registered business development company.
We discuss how his career has traced the rise of private credit: He began his career in the Mergers & Acquisitions Group at Drexel Burnham Lambert, then founded the high-yield finance business at Chase Securities (now JP Morgan Chase), served as head of Leveraged Finance for RBC. He launched the Churchill Financial Group in 2006, which was purchased by PE giant The Carlyle Group in 2011. The firm gets spun out in 2015, partnering with Nuveen, part of the trillion-dollar asset manager TIAA.
Kencel explains how the exclusive relationship with TIAA allows a unique approach to private credit: Churchill lends to middle-market firms while also taking an equity stake in those firms. This puts the company on the same side of the table as their clients, while giving the firm the potential for equity-level returns when companies do well.
He explains how extremely selective Churchill is in the firms and kinds of business they select for investment: As an example, he notes they did not have a single default during the entire pandemic era.
His current reading is here; A transcript of our conversation is available here Tuesday.
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Be sure to check out our Masters in Business next week with Aswath Damodaran, Professor of Finance at New York University’s Stern School of Business. Known as the Dean of Valuation, he teaches Corporate Finance and Valuation to the MBA students at Stern where he has been voted “Professor of the Year” by the graduating M.B.A. class nine times. His textbook “Investment Valuation” is the standard in the field. His next book comes out in December, and is titled The Corporate Lifecycle: Business, Investment, and Management Implications.
The Splendid and the Vile: A Saga of Churchill, Family, and Defiance During the Blitz by Erik Larson