London-based Aquilam Capital has been launched to provide debt and equity for businesses operating in consumer and SME finance, leasing and mortgages.
The new manager says it expects to complete between six to eight deals a year, with each deal typically worth between £2 million to £10 million – though up to £25 million is possible.
The firm has been founded by Marc Sefton, who has been a structured finance professional for the last 15 years at Barclays, RBS and Shawbrook Bank; and Kieran McSweeney, who worked with Sefton at Barclays and Shawbrook, and also spent time at Morgan Stanley during a 16-year career to date.
The firm is not investing from a fund, with initial capital coming from Jamie Constable, who is described as being part of the “wider team” at Aquilam. He was the founder of turnaround investor Rcapital and has acquired more than 50 businesses.
Also part of the wider team is Steve Curtis, who has run around 20 companies as either chief executive officer or chairman.
The firm stresses its ‘hands-on’ approach. “We recognised the need for an investment firm which can provide exciting, entrepreneurial businesses with the right type of funding, but one which will also be a business partner; providing hands-on help, challenge and support where it is of greatest value,” said Sefton.
The speciality finance sector has been attracting increasing interest from LPs which have their core manager relationships and beta allocations already taken care of and are increasingly looking to niche strategies and the possibility of obtaining alpha.
Research from Cambridge Associates suggests that targeted gross IRRs from speciality finance strategies range from around 7 percent to 20 percent, meaning that at the upper end of the risk spectrum they may be capable of matching or even outperforming distressed credit.