Brian J. Daly, a pioneer of mezzanine financing in the power sector, passed away on June 1. He was 53.
While he held many roles throughout his 30-year career, Daly was best known in power finance circles for his two stints with Trust Company of the West, from 1992 to 2008 and again from 2014 to 2018.
Daly was responsible for more than 90 investments, representing over $2.4 billion of capital in the power, biofuels, and infrastructure sectors, during his first 16-year stretch at TCW.
It was there that he developed a novel financing solution for clients including Morris Energy Group and Fortistar, incorporating additional interest and principal, sweeps and warrants, that allowed developers to raise equity-like capital that still qualified as debt, therefore avoiding dilution.
"He essentially created the modern mezz market in our PF sector," writes a former colleague.
Besides his track record of improving returns for investors, Daly is also remembered for his business acumen and the wealth of accumulated knowledge that he brought to the table.
“My most memorable achievement with him, it's not one time but instead it is the countless times I saw him change a negotiation in his favor, his ability to recall facts about most generating plants, and his ability to utilize a sponsor's assets, credit or resources to enable them to borrow and develop more than they would otherwise through other lenders,” writes another former colleague.
Daly is survived by his wife Terri and his children Kathleen, Kevin and Elizabeth.
A mechanical engineer and graduate of Rensselaer Polytechnic Institute, Daly began his career in 1985 with Long Island Lighting, where he negotiated power supply contracts with non-utility generators.
He moved to Axel Johnson Energy in 1987 as a project manager, where he handled investments in and fuel supply to unregulated generation projects, before earning an MBA from Baruch College, City University of New York.
He joined TCW in 1992, rising through the ranks to become managing director and head of power for the energy and infrastructure group, whose assets under management grew from $500 million to more than $6.3 billion on his watch.
While at TCW, Daly worked on the $525 million acquisition financing that allowed Complete Energy Holdings to buy the 1,022 MW La Paloma project in Kern County, Calif., with no money down, as well as deals with Colmac Energy and Pacific Winds.
He also played a key role in the creation of the Global Project Fund series of collateralized loan obligations and the European Clean Energy Fund—a joint venture with Swiss Re and Conning Asset Management—which was the largest dedicated power fund in Europe at its closing.
In 2008, Daly left TCW to join Conning & Co. as director for the firm's alternative investment program that focused on clean energy and the carbon credit market.
Together with former TCW colleagues William VanHerwarde and Brett Macune, he left Conning to launch Babson Capital Management’s energy finance group in 2012.
Daly left Babson shortly thereafter, returning to TCW to lead its newly formed power group in January 2015.
From 2011, he was also on the board of directors of the Bank of Labor, a financial institution that serves the labor movement and whose largest shareholder is the International Brotherhood of Boilermakers.
He was an avid baseball player and follower of both the New York Yankees and the New York Mets.