Newstead Capital

New lending opportunities in private debt

The Firm

Newstead Capital Limited is authorised and regulated by the Financial Conduct Authority (full scope AIFM). We offer management and advisory services to institutional investors in asset backed direct lending strategies. Newstead is the manager of the Newstead Real Estate Lending Fund.

The Newstead team is highly experienced, with a solid track record and complementary skills ranging from origination and credit analysis to capital markets.

Newstead endeavours to offer investment solutions that offer a yield uplift to its investors by accessing private and hard-to-access markets. In today’s low interest rate and volatile investment environment, illiquid markets often offer superior risk adjusted returns with low correlation and strong downside protection.

Real estate debt Structured lending Whole loan acquisition Liquid credit

Real estate debt

This strategy aims to capitalise on a significant financing gap in the real estate lending market, as banks continue to cut back from real estate backed commercial lending due to increased regulatory and capital constraints.

Bank lending in the sector declined from £23.9 billion in 2008 to £14 billion in 2017.

This funding gap creates an investment opportunity that can deliver attractive risk-adjusted returns across a diversified loan pool. The Newstead team has overseen £800m of deployment into bridging and development finance and small balance CRE in the UK and Ireland, partnering at early stages with originating platforms who continued on a successful growth trajectory.

Newstead RELF 1 launched in September 2022 with commitments of £80m. This is the first Newstead fund and has been created with a cornerstone investment of £30m from Homes England, alongside Greater Manchester Pension fund and other institutional investors. It will provide loan capital to the SME residential housebuilding sector.

Structured lending

This strategy focuses on providing funding to specialty finance companies to grow their lending business secured by granular loan portfolios or providing acquisition finance to sponsors. As bank finance is retrenching from many areas, European markets are seeing an increase in specialty lenders who are dependent on third party funders and capital markets.

The Newstead team has experience in lending against loan portfolios with varying underlying collateral including real estate, SME, receivables, secured and unsecured consumer loans and across the capital structure (Senior, Mezzanine and Equity).

The Team has executed many funding solutions to enhance investor returns with efficient term structures.

Whole Loan acquisition

This strategy focuses on acquiring loans via forward flow agreements from specialty finance companies and non-bank lenders. Since 2014, the team has acquired and securitised over £3bn of consumer and SME loans, invoice receivables and mortgages in the UK and USA.

The strategy may also involve acquiring existing portfolios to capitalise on situations where a lender may be facing balance sheet constraints or deleveraging pressure. Based on its portfolio analytics and valuation capabilities, Newstead is able to select pools with good risk-reward prospects and offer competitive bids for the sellers.

The Newstead team focuses on niche asset classes rather than widely marketed and overbid markets.

Liquid credit

The Newstead team predominantly focuses on delivering superior returns by accessing illiquid private markets. However, in some market conditions, even liquid asset classes may offer attractive risk adjusted returns.

In these circumstances, the Team would look to invest in asset-backed securities and high yield bonds.

Newstead Capital

New lending opportunities in private debt

The Firm

Real estate debt

Structured lending

Whole Loan acquisition

Liquid credit

The Team

Simon
Champ

CEO

Angus
Donaldson

COO

Abror
Ismailov

CIO

Karsten
Buecker

PdD, Head of Risk

Nuno
Vieira

Head of Operations

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