CHICAGO — Lancaster Pollard & Co., an Ohio-based boutique investment banking firm that specializes in health care, senior living, and affordable housing transactions, has hired a senior-living finance veteran to help the firm begin to expand its taxable business.
Craig Jones joins the firm from Red Capital Group. As senior managing director, Jones, who has 30 years of senior-living financing experience, will staff a new office in Birmingham, Ala.
Jones is part of a larger hiring spree by the growing firm. So far this year it has hired seven employees, both senior executives and support staff, and plans to hire eight more before the end of the year, according to president and co-founder T. Brian Pollard.
Five of the eight hires set for later this year will be bankers.
April was a record-setting month for Lancaster Pollard. The firm closed 25 transactions — 23 of which were senior-living deals — totaling $166.2 million.
Despite the well-known challenges facing the health care and senior living sectors, Lancaster Pollard has grown quickly over the past few years. Part of its success comes from the firm’s duel role as an investment bank and a mortgage bank, Pollard said.
It executes both tax-exempt financing transactions and taxable financings under a variety of government programs offered by agencies like the Federal Housing Administration and Fannie Mae.
Other market trends, like consolidation in the health care sector, direct placements with banks in lieu of public deals, and low-interest rates in the housing market, have also boosted business, Pollard said.
“As the tax-exempt markets have become a little less efficient over the past few years — though they are improving — we’ve been able to shift to taxable government-agency programs, which are in fabulous demand right now,” he said. “That’s fueled a lot of our growth, being able to shift from one market to another market. We fully expect, as rates rise and tax-exempt markets improve, we will see a large shift in our business back to that.”
The anemic volume of tax-free health care paper floated over the past two years is likely to change, Pollard predicted.
“There’s been concern about government payer sources and the general state of the economy, which has resulted in a lot of projects being put on hold,” he said. “But that can only be done for so long; ultimately the investment in new properties and equipment has to be made. We’re already starting to see that organizations are starting to feel more comfortable about moving forward.”
In his new position, Jones will start to offer borrowers alternative financing options such as subordinate debt and equity financing products.
“In this environment where underwriting standards are more conservative, there can be a gap in funding to complete a project or a refinancing,” Pollard said. “We will offer mezzanine funding and equity funding to fill that gap.”
Lancaster Pollard has 93 employees, including about 25 bankers and 17 associates or analysts. It has six offices. With last year’s opening of a new Philadelphia office, the firm now has a banker covering every state, Pollard said.
