UMB Bank’s Post

Wealth managers battle it out in the alternative asset thunderdome 🤼 HNW and UHNW clients hold approximately 20% of their wealth in alt assets. That’s a LOT of 💰 that if valued accurately could be leveraged for loans at higher LTVs. These clients are yielding strong returns from alt assets while also borrowing against them. They’re able to access cash fast through "Security or asset based loans," especially during periods of high inflation and interest rates. 📈 Banks notice this shift towards asset-based loans rather than cash-flow loans during uncertain economic times when traditional lending becomes challenging. Total asset-based lending commitments increased 10% in 2022 to $502.3 billion. The benefits of asset based vs cash loans are: • Favorable financing, higher advance rates, more competitive pricing and terms • Faster processing times  • Returns on investments usually cover the loan's interest • Opportunity to borrow more against assets that are increasing in value So, wealth managers, get your leotard on and enter the thunderdome, it’ll help unlock financial opportunities for your clients. It's time to unleash that hidden wealth. 🎉

The Asset Qualifier (or Asset Depletion) Loan product is an excellent solution for clients with substantial assets that can be used to qualify as their income. The borrower qualifies solely based on their liquid and investment assets. I have a great lender for this product. Traditional employment and debt to income (DTI) calculations do not apply when justifying the ability to repay the debt. The Asset Qualifier: · Loans up to $2,000,000 · Primary Residence and Second Home · Fixed Rate, Adjustable Rate, and Interest only payments · Max DTI 50% · Purchase 80% LTV · Cash Out 75% LTV · Bonds and any Retirement can use 100% of asset balance for those 59.5 years of age and above · Large deposits do not need to be sourced · Cash Out can be used as reserves

Leveraged loans is a growing asset class that typically offers investors some protection in the form of security and seniority that most vanilla borrowing doesn’t. It also has the capacity to provide attractive income. Learn more about this asset class here: https://bit.ly/3ZwKEX7 Capital at risk. For professional investors only.

“Why does a sponsor think that borrowing at 12% to return capital will help an LP whose cost of capital is 8-10%?” Despite having the benefit of investing across multiple asset classes and optimizing their utility functions, traditional asset-class investing approach restricts LPs from generating value, and in certain cases potentially destroying value. It also creates an opportunity for investment professionals with the right mindset to step up and help LPs benefit from their natural edge as multi-asset investors. A shout out to Ted Seides for a good “first principles” article that covers various angles of NAV lending. #alternativeinvesting #privatemarkets #portfoliomanagement #investing

New Year, New TMF Group Capabilities. If you're a #PrivateCredit / #DirectLending fund manager and you are performing your #FundAdministration and/or #LoanAdministration in-house, perhaps an #Outsourcing conversation would lead to more efficient, lower-cost and investor-preferred operations. Please contact any of my colleagues below to discuss how this solution can help LPs feel more secure and save your GP time and money. David Grant | Devin Vasquez | Darrell Pisarra | John Harnett | David Goldstein | Kim Tran | Gerard Smith

Totally Amit Sinha! I would often add an additional 4th layer of leverage for liability-based investors!! Understanding your holistic portfolio profile and structural dynamics are critical for non-myopic investors. « Details » matter in the long run. Ted Seides Excellent piece.

Viainvest sees increase in asset-backed securities in July #business #finance #fintech #lending #P2P #investment #P2PFN https://lnkd.in/gHh4FHDE

Leveraged loans can offer an attractive credit opportunity for investors seeking income or yield. They can also offer security from their first claim on identifiable assets and seniority in the corporate debt profile. Learn more about this asset class here: https://bit.ly/3ZwKEX7 Capital at risk. For professional investors only.

Silly or Not Silly? Not Silly, for now, in my view. There is a laundry list of things that I can think of as to why they are not silly. But the biggest comfort I get is the fact that when things go bad on some of these loans, managers have more control in the way you workout the loan. Plus investing with a seasoned bench as compared to a new kid on the block makes a whole lot more sense #clo #collateralizedloanobligation #leveragedloan #middlemarket #bdc #structuredfinance #securitization #privatecredit

Private Credit Loans Are Growing Bigger and Breaking Records: The $1.5 trillion private credit market just set a fresh record for the largest loan in its history. With growing firepower, direct lenders are poised to take ever more deals away from banks and from the junk bond and leveraged loan markets.