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Magic Johnson teams with TCW in lending venture

November 17, 2009|Tom Petruno

Earvin "Magic" Johnson, who has spent his post-basketball career on retailing ventures in underserved urban areas, is targeting another market he figures is in need of help: lending to mid-size companies.

The ex-Laker's firm, Magic Johnson Enterprises, is teaming with Los Angeles money manager TCW Group Inc. in a venture to make loans to mid-size businesses with capital raised from big investors, the firms said Monday.

The venture, TCW CapitalAssist Management, doesn't plan to help urban firms exclusively, but Johnson is expected to advocate for them in particular. Johnson's company has "a demonstrated expertise [in] urban areas that we do not have at TCW," said Mark Attanasio, head of TCW's leveraged finance group, which would manage the new venture.

Johnson, who has built movie theaters, Starbucks stores and other businesses in urban locations around the country in the last 20 years, said the venture would help firms starved by the credit crunch of the last two years.

"We were getting all of these calls" from businesses about credit, Johnson said. "We didn't know how to help them."

The TCW-Johnson venture isn't specifying a company size it wants to target, but Attanasio said it would make loans of millions of dollars each rather than "$100,000-type loans."

Credit conditions have improved this year, but mostly for larger companies -- leaving plenty of opportunities to lend to solid smaller businesses, Attanasio said. "From investors' standpoint it's a good place to look for returns," he said.


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