A private equity type investment in the core loan activity of mainly European Banks
Return driven by performance of banks' core corporate loan portfolios
No exposure to "non strategic" assets
No dilution risk stemming from future capital needs under changing regulation
Generate mid teens returns originating transactions providing regulatory capital relief on mainly European Banks Corporate Loan portfolios
Rationale for banks
Create Tier 1 capital cushion in a moving regulation and accounting environment
Maintain the lending activity and protect customer franchise
Allow capital deployment in other areas of the bank if needed
Rationale for investors
Monetize the illiquidity and cost of capital premium
Access assets originated as part of a bank core underwriting activity, and therefore subject to the bank's credit analysis, otherwisedifficult to source
Credits selected for capital efficiency, not arbitrage
Loans funded by the originator, providing cheaper non-recourse funding than current market
Alignment of interestwith originators retaining a portion of the risk
