Sands Brothers Asset Management has launched Genesis Merchant Partners, a fund that makes asset-backed and secured loans in unfashionable markets.
Sands Brothers Asset Management has launched Genesis Merchant Partners, a fund that makes asset-backed and secured loans in unfashionable markets. Sands Brothers has consulted extensively in the asset-backed lending sector to create a fund that seeks to achieve best practice in all areas including deal origination, due diligence, risk management, fund structure, valuation, origination fees and expenses, investor communication and transparency.
The fund will make strategic and opportunistic asset-backed and secured loans in underserved, out of favour, and ‘under the radar’ markets, with target investments expected to range from USD250,000 to USD2.5m.
Loans will be made to all types of US and foreign borrowers, including private companies, publicly-traded companies, real estate ventures and niche businesses. By serving these underserved markets, Sands Brothers believes it can generate higher returns than those generated by the typical asset-backed loan fund.
Sands Brothers has been aggressively working to source, negotiate and prepare transactions that it anticipates closing during the remaining months of 2007, and says it currently has a significant pipeline of opportunities from multiple sources.
Due to time constraints the fund managers have chosen to limit initial capacity during the fund’s first abbreviated month to about USD2.4m to match the loan opportunities it anticipated closing during that period. Sands Brothers says future monthly capacity will be closely monitored in to minimise the fund’s cash position and maximise returns to investors.
‘We are eager to provide investors with a meaningful way of gaining access to the direct lending space and a means of capitalising on the present turmoil in the debt markets,’ the asset manager says. ‘We look forward to the acceptance of additional capital to invest in November.’
Founded in 1999, Sands Brothers Asset focuses primarily on private investment vehicles structured to offer investors access to venture capital, hedge funds and other alternative investment opportunities. The firm advises the Select Access Funds, which are private funds of hedge funds, and provides investment advice to investment limited partnerships and limited liability companies for which its affiliates serve as general partner or member-manager.
