Sabal Gains New Institutional Ownership

Trident VII funds, which are managed by Stone Point Capital has acquired a majority stake in small balance lender Sabal Capital. As part of the agreement Sabal Investment Advisors and Sabal Investment Holdings will integrate into Sabal to create a vertically integrated platform. The acquisition will allow Sabal to expand its product offerings and expand it footprint. In addition, senior management has invested significantly in the company. As part of Stone Point’s acquisition, Sabal will retain its name, branding and team. The acquisition will close in August 2018. We sat down with Pat Jackson, founder and CEO of Sabal, to talk about the acquisition and what it means for the future of the firm.

GlobeSt.com: What was the impetus for Sabal to find a new investment partner?

Pat Jackson: We have grown so much and we have really come to a point where it made sense for us to look at replacing our existing investors with an institutional investor, like Stone Point. This will continue to fuel our growth, more than anything else, and it is a natural stepping off point for some of our investors that are not active in the business. Stone Point not only brings access to capital to allow us to do more things, but also has expertise to help us do things that we would otherwise have to do on our own. They are set up to help best-in-class management teams achieve more than the otherwise could doing it themselves.

GlobeSt.com: Was this decision motivated by the company’s internal growth and expansion needs or trends that you are seeing in the market?

Jackson: It is absolutely part of what we are seeing in the marketplace. This is an optimum time for growth, and we think the small balance commercial real estate market is poorly served and underserved. There are few companies positioned to achieve what we believe can be achieved in the small balance space. We have built a company that has a nationwide servicing platform, we are rated a primary special servicing company because we keep all of our servicing and we have an investment management service where we retain the BP. That unique business model is going to be very attractive to borrowers as we enter new product spaces. In order to fully fulfill this opportunity, we wanted to be positioned with a well-known institutional partner to allow us to do that. Stone Point certainly has the pedigree of finding great companies and giving them the resources to grow. We want to be the next success story for Stone Point, and we think we have the market and the infrastructure to do that.

GlobeSt.com: Because of your past successes, did you see a lot of interest when you came to the market?

Jackson: We felt it was important to have the right partner, but it was a robust process. We were very pleased with the high level of interest we had. Once people got to know Sabal, they saw that it was a company that has all of the elements and ratings to take off. That made us very attractive. However, it wasn’t just about who paid the highest price. It was about who would be our partner that would help us achieve our goals. We did our due diligence, and in my research, the unanimous comment back is that Stone Point is smart, thoughtful and wants to help you grow.

GlobeSt.com: What changes can the industry expect from this move?

Jackson: Definitely more product. That is what we think that we need. It is the same management and the same team, so you won’t see new faces. What you will see is a change in our ability to be able to add additional product that we think is needed in the marketplace. To the degree that we can be a single source of capital relative to lending for many of our brokers and banks, we think that makes them more efficient and they can focus more on their core business. Every one wins in the process.