Boutique private credit manager Revolution has $3 billion in assets under management while mortgage and specialist lender ColCap has over $19 billion.
Under the partnership, ColCap will acquire a minority 14 per cent shareholding in Revolution while Channel Capital converts its existing interest into a 25.8 per cent shareholding.
Channel Capital currently provides non-investment services to Revolution including operations, distribution and client service and this relationship will be maintained.
Revolution’s investment team will retain majority ownership, ensuring continuity of leadership, strategy and alignment of interest with investors.
The partnership will enable enhanced origination in institutional grade, asset-backed securities, focusing on mezzanine and senior tranches, whole loans, as well as warehouse facilities. These assets aim to deliver regular income, diversification and capital protection, without exposure to subprime markets, it said.
“This investment reflects our commitment to expanding our diversified and resilient funding platform to support our future growth and strategic ambition,” said ColCap chief executive Andrew Chepul.
“Revolution’s disciplined credit approach and strong institutional relationships complement our strategic vision and operational strengths in origination, which will add scalable funding diversity as we transition towards a broader asset management focus, less reliant on securitisation funding sources.”
Bob Sahota, managing director of Revolution, said: “This strategic investment further diversifies our origination pipeline and deal flow by leveraging ColCap’s established lending platform and track record to expand our access to high quality lending opportunities, enhancing portfolio depth and diversification.”
ColCap added this is unlikely to be its only deal as it will continue to look at opportunities for growth through strategic investments and acquisitions in complementary markets.
There have been a number of strategic partnerships enacted in recent weeks with Ironbark Asset Management forming a strategic partnership with US-based global quantitative equity manager Intech Investment Management LLC last week to expand Australian institutional investors’ access to the firm’s investment capabilities.
Earlier in October, Apostle Funds Management partnered with US-based quantitative manager Qtron to deliver Australian investors access to its global equity strategies. Founded in 2016, Qtron combines data-driven models with human insight to deliver outperformance – specialising in emerging market equities, global enhanced equities, global small cap equities and global long/short equities – and has US$1.25 billion ($1.9 billion) in assets under management.
