Spotlight on Siepe: Innovation for the CLO and Private Credit Market is Finally Here

By Kevin Marcus, Partner, Co-COO and Head of Strategic Operators for WestCap

Over the past several years, syndicated loans and private credit have become the fastest-growing areas within the alternatives market, with private credit alone reaching $2.1 trillion in assets and committed capital globally in 2023. The market has expanded as regulators have pressured banks to take a more conservative approach to lending, sending more corporate borrowers to seek other sources of capital.

Technology serving the collateralized loan obligation (CLO) and private credit ecosystem has not kept pace with its growth. Software that historically targeted other kinds of loans is ill-suited for a complex asset with different characteristics and funding types, leaving private credit managers to cobble together antiquated tools. Even those piecemeal solutions are sub-par, as legacy vendors have been acquired by much larger conglomerates that view them as non-core, mature business segments, leaving products underinvested. As a result, available technology hasn’t kept up with the needs of a nuanced, convoluted industry wrangling both structured and unstructured data and managing strict compliance requirements. Further, despite the rapid growth in assets funding these markets, no technology or service provider developed an integrated, end-to-end solution to modernize data and workflows in this space.

This leads private credit managers, CLO issuers and investors to process data and handle documentation manually and inconsistently. This inefficient process not only leads to higher costs but also to higher rates of error that risk reputational damage and compliance violations. Private credit managers need a trusted solution to meet the moment and help them navigate the complexities of the industry.

An End-to-End Solution

Meet Siepe. Founded in 2012, the company is building a full-suite, end-to-end solution for private credit, CLO and alternative investment managers. Its cloud-based platform provides a seamless experience for accessing all data — from borrowers to lenders to investors — in a centralized format. Siepe’s solutions allow for the collection, processing and management of different layers of data, and streamline critical workflows, such as loan settlement, compliance and collateral administration.

The company combines the operational workflows of the front, middle and back offices of asset managers into a single user interface, bringing full transparency to data and the entire investment lifecycle into perspective. Siepe enables managers to become more efficient by eliminating costly manual processes and transforms data into an asset they can use to gain perspective. The company’s tools also reduce risk by cutting down on errors and improving oversight. Siepe leverages artificial intelligence, but critically also provides a human touch through a strong service layer that generates trust.

Another factor that promotes trust is the strength of Siepe’s team. Founder and CEO Michael Pusateri has deep industry experience as former CTO of Carlson Capital and co-COO / CTO of Highland Capital Management. His background gives him insight into the sector’s unique pain points and complexities and the know-how to build solutions that work. Pusateri also has a deep bench of senior leaders on his team who intimately understand the asset class and what clients need. Most recently, the team welcomed Mark Schultis as its new President, having previously served as former Partner and Senior Vice President at IHS Markit, where he oversaw the company’s WSO business.

Taking Siepe to the Next Level

At WestCap, we’ve seen the potential that new data and technology solutions can unlock in the private credit space. Our team has deep experience — as founders, operators and asset managers — in growing capital markets and designing solutions and services that transform industries.

Before WestCap, I served as Co-Founder, President, COO and Board Member of Ipreo, a financial technology business designed to solve the challenges of IPO book-building processes. The company was sold to IHS Markit for just under $2 billion in 2018. WestCap’s Founder and Managing Partner, Laurence A. Tosi, and Jaime Hildreth, a Partner at our firm, incubated iLEVEL, portfolio and risk management software for private capital managers, while holding senior leadership roles at Blackstone. Ipreo acquired iLevel in 2015.

Thanks to our expertise in private markets and financial technology, we understand Siepe’s vision and are proud to announce that we’re leading a $30 million Series B investment round in the company. As part of our partnership, I’ll be joining the Siepe board along with Ryan Benevides, a Principal at WestCap who previously helped lead investment activity for Blackstone’s credit group.

Already, Siepe has seen significant growth this year and is one of the few early-stage businesses in this market that has gained credibility with blue-chip asset managers. The infusion of capital, along with the support of our team, will build on this momentum to help Siepe accelerate its growth, which includes investing in customer teams to meet demand, advancing its product suite and strengthening strategic partnerships.

We look forward to helping Siepe build a true end-to-end solution for private credit managers and participants in the CLO market that modernizes this rapidly growing space. Siepe’s success will represent a virtuous cycle: In making private credit and CLOs more efficient and accessible, it will fuel lending for other companies, driving innovation.