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Global alternative asset manager MA Financial (ASX: MAF) has formed a partnership with Humm Group’s (ASX: HUM) asset finance platform Flexicommercial.
This collaboration will see MA Financial acquire up to $1 billion worth of commercial asset finance loans through its private credit managed funds in a forward flow arrangement.
This reportedly Australian-first partnership grants MA Financial’s private credit funds access to a significant pipeline of high-quality, prime asset finance loans, leveraging Flexicommercial’s expertise.
The $1 billion worth of commercial asset finance loans, which include an initial seed pool of $500 million, represent a substantial portion of Flexicommercial’s origination volume during the partnership’s initial term, alongside its warehouse and term deal programs.
MA Financial’s head of credit investments and lending Frank Danieli said: “Our new strategic partnership with Flexicommercial is an innovative financing strategy and an advancement for Australia’s private credit industry.
“We have seen the power of co-lending programs globally and are seeking to introduce these opportunities to our local market.
“This arrangement allows us to access an attractive pipeline of prime asset finance deal flow, diversify MA Financial’s private credit portfolio and participate in the growth of the commercial asset finance sector for our managed funds.”
Danieli said that they have identified asset financing as “an attractive” lending space for some time as the rise of the broker channel creates more options for borrowers and a more “level playing field for non-bank financers to provide customers lending solutions”.
“We like sectors where banks are ceding market share and are no longer the most efficient provider of capital,” he said.
“We think there are compelling risk-adjusted returns available in these market gaps. This unique partnership structure with Flexicommercial is an effective way for us to capitalise on these thematics in asset finance for our managed funds.”
He also said that Flexicommercial is one of the “leading asset finance providers in Australia” and carries with it a strong track record with an experienced and capable management team.
“This partnership enables them to focus on what they do best with additional capital,” he said.
Under the terms of the partnership, MA Financial’s managed funds will finance the assets alongside a global bank, while Flexicommercial will retain servicing and other loan management responsibilities.
CEO of Flexicommercial, Stuart Grimshaw, said: “Our partnership with MA Financial offers a diversified funding platform with scale to accelerate growth in constrained markets.
“It’s a strategic opportunity that allows us to service our clients while diversifying our funding sources, creating capital flexibility between our warehouses, term programs and this strategic partnership, which is a ‘capital-lite’ structure.
“We have worked closely with the team at MA Financial to deliver this new funding platform.
“As Frank has outlined this is a true strategic partnership and one that will add substantial value to our shareholders and MA Financial’s investors.”
The transaction is supported by a diversified pool of high-quality business-critical equipment assets, originated and serviced by a leader in the commercial asset finance sector.
The forward flow arrangement marks the beginning of a long-term partnership between MA Financial and Humm Group, with potential for expansion beyond the initial $500 million seed pool commitment.
[RELATED: MA Financial expands asset management division]
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