As asset-backed finance continues to gain momentum across private credit, investors are increasingly looking to the strategy for diversification and downside protection. Ian Fredericks, CEO of Capital Solutions at Hilco Global, a subsidiary of ORIX USA, recently spoke with Private Debt Investor about the long-term growth of the asset-backed finance market, what’s driving LP demand, and the core capabilities managers need to succeed.
Highlights from Ian:
- “There has been, over the last couple of years, a focus on doing more ABF, ” said Ian Fredericks, CEO of capital solutions at Hilco Global, in an interview. “In terms of talking to potential LPs and investors, most of them are looking for sleeves that can deploy in asset-based finance; it’s definitely an area of private credit that is growing.”
- Fredericks said that while investors are probing the impacts of current events on ABF portfolios, the trend towards doing more ABF deals is in line with long-running strategies at some of the largest general partners.
- He added there are four qualities necessary for effective assetbased lending: having an origination machine, solid underwriting, collateral monitoring and competent workout capabilities.