Overview
Structured Participations
Specialty Finance
Real Estate Equity Bridge
Overview
We have a broad investment mandate. Our flexible structure and investment strategy allows us to deal in a wide range of companies, assets, funds and partners in complex or special situations. As a result, we have built an extensive network and have access to select the best transactions from a diverse set of asset classes. We have built a unique financing business that addresses the objectives of successful entrepreneurs, investment managers and other high net worth individuals with illiquid assets and unique access to interesting private situations that present lucrative investment opportunities.
We operate within a set of important core investment principles:
- We are flexible
- We compete aggressively on speed, closing certainty and tolerance for complexity
- We are opportunistic
- We are not compelled to invest at a particular pace, size or format; we focus on investible circumstances rather than a singular mandate
- We have low tolerance for principal risk
- We typically exchange asymmetric security or structural protection for disproportionate upside sharing for our partner
- We have strong negative controls
- We are reluctant, but willing and able, to directly impact asset management or day-to-day operations
- We have a short duration bias
- We favor self-liquidating or incentive constructs that return a substantial portion of our basis within two years
Structured Participation
Our Structured Participation group invests in and alongside entrepreneurs, general partners and other principals with unique investment constructs that provide maximum security and downside protection, while allowing our partners to retain the majority of the long term upside in the investment. We seek out partners who have built successful companies or other assets with demonstrated value, and wish to invest alongside us in their own high conviction ideas and enterprises but lack the required liquidity, or to realize liquidity from the enterprises or assets they have created.
Our typical transaction structure provides capital to fund an opportunity and secures our investment against uncorrelated assets that our partner is willing to collateralize. In exchange for this security, our partners retain the majority of the equity upside in the underlying opportunity.
“Convexity” is another key feature of our typical transaction structure. Our construct provides escalating cost incentives for early redemption by our partners, which creates flexibility and allows our partners to retain maximum upside, while at the same time de-risking and providing additional downside protection for our investment. Alignment is key to this strategy, as our partners share our investment philosophy and retain an active role in managing the investment. This structure is typically self-liquidating, providing attractive short and long-term returns by way of rapid principal recapture coupled with participation in future value creation.
Unique advantages of our approach:
- We provide superior value and principal economics by allowing our partners to retain the majority of the upside in their ventures
- We are more flexible than traditional debt, with no fixed maturity or prepayment penalties
- We have deep experience with a wide variety of collateral assets that traditional lenders cannot lend against
- We do not seek any voting, oversight or other control rights, and do not seek to influence the operations of the investment
- We create aligned interests between us and our partner through rapid principal return and escalating cost incentives to encourage early redemption
- We have no fixed horizon for investment outcomes
Specialty Finance
Our Specialty Finance division makes senior and subordinated secured debt investments that generate strong cash flows in companies across a wide variety of industries. We generally invest in financial assets we are willing and able to take over if necessary and in which we have experience and connections to future buyers. We offer industry expertise in a wide range of sectors and a flexible investment strategy that provides capital quicker and more efficiently than our competitors.
We firmly believe we can systematically lower the cost of funds for financial assets by accumulating and collateralizing them for eligibility in larger capital pools. We have been successful in extracting superior return on these assets for our partners once they secure a stable funding source.
The segments we invest in include:
- Real Estate Bridge Loans
- SaaS Recurring Revenue
- Payment Processing Residuals
- Tax Credit Financing
- Equipment Leasing
- Litigation Factoring
- Structured Settlements
- Charged Off Receivables
- Receivables Factoring
Real Estate Bridge Equity
Our Real Estate group provides structured bridge financing on a wide variety of commercial property types. We provide bridge equity solutions to partners who have accumulated equity value in real estate portfolios that are not easily leveraged by traditional lenders.
We provide this financing through structured equity fixed pricing which allows entrepreneurs to own the assets free and clear upon full repayment. We will invest up to 100% of the transaction value in exchange for at least double collateral coverage via other real estate assets and contingent control on all purchased and collateralized assets. This strategy is an alternative to raising equity which allows our partners to retain the lion’s share of the upside while leveraging unrealized value in their current portfolio.