By Guglielmo de Stefano on 20th November 2015
Asset manager Victory Park Capital (VPC) and investment giant KKR yesterday announced a $175 million asset-backed securitization of unsecured loans originated by Avant. The loans appear to be worth $195 million and will support three trances of the 144A securitization process.
After this transaction, Avant should be able to accelerate growth plans for its U.K. Consumer loans platform and it will continue acting as the originator of the underlying loans for the asset-backed securities -without being directly involved in the process.
Avant is a Chicago-based consumer lending platform. Founded in 2012, the platform employs over 700 staff in Chicago, Canada and the UK. Its core business focuses on lending to consumers who are just below prime and since inception it has sold $1.7bn of unsecured loans. Only last September, Avant raised an additional $325m via a Series E funding round, with total equity raised hitting $659m.
KKR has provided $100 million in capital in support for Avant’s Institutional Marketplace - a platform that enables institutional investors to purchase loans originated off of Avant’s platform – and this deal seems like a precursor for other deals with Victory Park.
Zach Jarvis, a principal on KKR’s credit team, commented:
VCP believes that Avant is an important platform in the space and this securitisation might well be the first of many. Karrie Truglia at VPC commented:
“This securitization will further Avant’s ability to provide innovative and affordable financial products to middle class consumers in the growing personal lending industry. Since inception, Avant’s growth has been impressive and we look forward to continuing our close partnership as one of the company’s largest providers of institutional capital.”
The relationship between VCP and Avant was forged two years ago, when the asset management firm provided the first credit facility to the alternative lending platform. To date, this relationship is worth $500 million.
Since 2010, Victory Park Capital has made more than $2.2 billion of investments and commitments across a number of financial technology platforms, geographies and products. Just last February, it has committed $420 million to Funding Circle US and UK. The company has existing relationships also with other platforms, including the like of, Assetz Capital, Borro, OnDeck Capital and Upstart.
AltFi is returning to Amsterdam for its second annual Summit in the city. The inaugural event last year was a roaring success, with key figures from across Continental Europe's alternative finance and digital banking sectors highlighted. These included Jeroen Broekema, managing director of Funding Circle Netherlands, and Mieke van Engelen, head of innovative partnerships at ABN AMRO's standalone lending platform, New10.