Asset-based specialty finance is a growing segment within private credit that offers investors:
Strong cash yield
Downside management
Diversification benefits
Northleaf's asset-based specialty finance strategy is underpinned by highly diversified pools of collateral assets and strong lender protections.
Investment Approach
Flexible Capital Solutions
We provide flexible capital solutions across senior debt and junior capital.
Low Correlation, Niche Verticals
We focus on niche asset verticals that provide high cash yield and exhibit low correlation to market and macroeconomic factors.
Disciplined Investment Philosophy
Our target asset verticals are underpenetrated by traditional and generalist capital providers and require underwriting and structuring specialization.
Spotlight Asset Verticals
Music Royalties
Funding secured by the contractual right to receive a portion of income generated by a song or composition.
The inelasticity of music consumption provides stable yield and diversification benefits.
Commercial Legal Assets
Funding to individual claimants, companies or law firms, collateralized by future settlement proceeds of meritorious cases.
Asset specialization creates high barriers to entry, leading to strong risk-adjusted returns.
Healthcare Receivables
Funding for medical procedures performed and personal injury settlements involving third-party liability.
Portfolios are well-diversified with settlement proceeds typically paid by “A”-rated insurance companies.
Factoring
Funding of invoice receivables facilitating working capital management for small- and medium-sized businesses.
Characterized by short duration, diversified assets, strong credit-quality payors and multiple layers of collateral protection.
Specialty finance is attractive through market cycles. From a borrower perspective, platforms require capital to scale and the demand drivers of these platforms are non-cyclical. From an investor perspective, specialty finance provides stable cash yield and downside protection. The opportunity is global and we are one of few players investing in North America, UK/Europe and Australia.
Company: Cutting Edge Group Description: Music financing platform focused on music tied to film, television and other wellness assets
Date: 2024 Asset Type: Second Lien Geography: Europe Sponsor: N/A - Specialty Finance
Second Lien
Cutting Edge Group
Active | Europe
Company: Duetti Description: Music financing platform focused on independent artists across a mix of genres
Date: 2024 Asset Type: First Lien Geography: North America Sponsor: N/A - Specialty Finance
First Lien
Duetti
Active | North America
Company: Inflexion Partnership Capital II Fund Description: Diversified fund with a portfolio of business services, health care and technology investments
Date: 2024 Asset Type: First Lien NAV Loan Geography: Europe Sponsor: Inflexion
First Lien NAV Loan
Inflexion Partnership Capital II Fund
Active | Europe
Company: DFW Capital Partners Fund VI Description: Buyout fund with a portfolio of business, industrial and health care service businesses
Date: 2023 Asset Type: Mezzanine NAV Loan Geography: North America Sponsor: DFW Capital Partners
