Fintex on Specialty Finance 2023

Our Update on Specialty Finance in 2023

“Which part of SpecFin do you target?”

We are often asked “Which part of SpecFin do you target?” The short answer is: any!

Defining Specialty Finance

Some ask: “What exactly is ‘Specialty Finance’ exactly?” Interestingly, when you google ‘specialty finance’, our website comes up first (Try it!) That’s because Fintex has been focused on Specialty Finance for a long time, well before the current SpecFin frenzy started. So we’re veterans in (what is, in the UK and Europe) a nascent, exciting arena in Private Debt.

These questions suggest there is a lack of clarity re. Specialty Finance. We welcome this.

Our Broad Spectrum

In our successful track record since 2016 in Specialty Finance we learned that highly attractive Private Debt opportunities can be found in any arena, from Consumer Finance to SMEs, from Litigation Finance to Property Debt.

This is very different from saying ‘we like’ e.g. Consumer Finance or Litigation Finance per se. In fact, we reject the majority of proposals we are seeing in this arenas. SMEs are also suffering at present and property investing is also not exactly flavour of the month.

Whilst each of our facilities, of course, lives in a specific sector, we are not led by sector exposure, nor do we normally chooses sectors that we wish to be exposed to. If anything, sectors are an output for us, not an input – and we believe this makes our facilities much better.

Our Approach

Our raison d’être is to find value ‘at depth’. We focus on building idiosyncratic and well-secured Revolving Credit Facilities (RCFs), where ample cashflows give us the opportunity to secure attractive risk-adjusted returns in Private Debt, with low risk. We get excited not when we see an operator in a sector but rather when we can identify a clear rationale to back a specific counterparty at that specific time, with that specific pricing and, importantly, with the protections we seek.

Facility Characteristics

Our facilities are normally backed by diversified asset pools and offer contracted cashflows, and they are inherently stable.

Ideal Size Bracket (Optimal Returns)

Operating successfully in this highly attractive and growing area for 6 years, we found our ability to achieve highly attractive returns manifests itself best in RCFs within the £5 – 15m size bracket, and Fintex has made a very good name for itself in this part of the market.

Contact
Adam Marks
adam.marks@fintexcap.com
+44 203 008 6873