Prospect Capital Corp.

THE SCOOP

A prospective buyer

New York-based Prospect Capital is a growing finance and equity firm that operates just outside of Wall Street, both literally and figuratively.  The firm was founded in 1988 by former Merrill Lynch managers in the aftermath of the Black Monday market crash, originally operating under the name Prospect Street.  Specializing in mezzanine debt and project finance, Prospect holds non-controlling interests more than 60 companies with a focus on relatively consistent markets such as energy and utilities, industrial products and health care.  Within these concentrations, the firm conducts its transactions in sponsorship deals, controlling interests, and buyouts.

The original partnership of Dick Omohundro, John Frabotta and Joe Cote initially operated in both high-yield investments and venture capital.  But in 1998, Prospect Street High Income (the high-yield business) was sold to Dallas, Tex.-based Highland Funds, and the venture capital side became known as Prospect Street Energy Corporation.  After issuing its IPO on the NASDAQ in July 2004, Prospect Street Energy Corporation became the more concise Prospect Energy (while keeping the PSEC abbreviation as its stock symbol).  Later, the firm changed its name to the present Prospect Capital Corporation, reflecting its more diverse interests.

Barrytown

At the top of the Prospect Capital ladder is chairman and CEO John Francis Barry III, who joined the firm in 1989 and purchased its venture capital practice in 1998.  Previously, Barry managed the corporate finance group of the now-defunct L.F. Rothschild and worked at Merrill Lynch, where he was an original member of its project finance group.  At Merrill, Barry participated in more than $4 billion in financing for ventures in energy, materials and manufacturingâ€"key industries for Prospect Capital.

Collector’s items

The roster of 60 properties in the Prospect Capital portfolio, while covering a diverse range, focuses on utilities and manufacturing.  Holdings in its portfolio include Gas Solutions Holdings, H&M Oil & Gas, Ken-Tex Energy Corp., Miller Petroleum and Stryker Energy.  Prospect Capital also seeks out key properties in mainstay areas such as health care, with more than $97 million invested in debt and equity on insurers, care providers and life science outfits.

But not all its transactions are quite so mechanical.  Among its more colorful holdings are Hispanic dairy outfit Castro Cheese Company and Boxercraft, a clothing company specializing in “spiritwear†for schools and organizations.

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Prospect Capital Corp.


10 East 40th Street
44th Floor
New York, NY 10016
Phone: (212) 448-0702
Fax: (212) 448-9652
www.prospectstreet.com

STATS


  • Employer Type: Public
  • Stock Symbol: PSEC
  • Stock Exchange: NASDAQ
  • Chairman & CEO: John Francis Barry III

Major Office Locations

  • New York, NY

Key Financials

  • 2009 Revenue: $100 million

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