Introduction
At Kingsbury & Partners, our mission has always been to deliver innovative financial solutions that provide exceptional value to our clients with transparency at the core of each opportunity. Today, we are delighted to announce our partnership with Alt Lending, a leader in private US student loan refinancing. This collaboration grants our clients and partners access to the lucrative U.S. private student loans market—a sector that has already attracted institutional heavyweights like KKR and Carlyle.
With the approval of our Product and Risk Committee, this partnership signifies another milestone in our journey to provide sought-after, risk-adjusted returns in exclusive asset classes.
About Alt Lending: Expertise That Drives Value
Alt Lending is operated by a team of industry experts with extensive experience in the U.S. student loan market. Having securitised over $18 billion in student loans, their acute knowledge of regulations, underwriting policies, and operational execution ensures an unparalleled level of expertise, whilst mitigating risk for both clients and partners.
For investors, this partnership is an opportunity to engage with a team whose track record demonstrates their ability to turn distressed portfolios into profitable investments with attractive risk-adjusted returns. Borrowers benefit from tailored refinancing solutions that offer lower interest rates and the chance to improve their credit standing, ensuring that financial relief is sustainable.
Student Loans as an Asset Class
The U.S. private student loan market is a $130 billion sector, with an estimated $30 billion in distressed loans. Investors stand to benefit from significant returns by capitalising on discounted acquisitions and the sale of reperforming loans.
Key Highlights from Alt Lending’s Strategy:
- Loans are acquired at 15-50% of their principal value, creating a substantial margin for profitability.
- Reperforming loans are resold at 70-90% of the principal value, achieving an attractive return for investors.
- Student loans are protected against consumer bankruptcy, providing a level of security not found in other asset classes.
Financial Forecasts:
- A projected 1.6x debt-to-income ratio ensures stable cash flows for investors.
- Over 70% of distressed loans can achieve reperforming status, significantly increasing portfolio value.
- The partnership targets a 13% annual coupon, with bi-annual interest payments, providing reliable income for investors.
This asset class not only offers financial potential but also delivers social impact by helping borrowers regain financial stability.
Mitigating Risks, Maximising Returns
Our partnership is built on a foundation of rigorous risk management:
- Comprehensive Due Diligence: Borrowers are assessed through escrow payments and guarantor agreements.
- Structured Investments: The Credit Linked Note is governed under Luxembourg and U.S. law, with FCA and FINMA-regulated sponsors.
- Defined Exit Strategies: Reperforming loans are refinanced or sold, maximising returns while minimising risk exposure.
John Hubball, Chairman of the Product & Risk Committee, writes:
‘’I’m delighted to get this one over the line. Alt Lending’s vision and business model fits perfectly into our risk appetite, with a strong management team and private equity funding guiding them through their start up phase. They are now entering their growth phase complemented by issuing their first debt instrument. The team have been an open book during the due diligence & structuring processes Kingsbury have performed, and I’d thank them for their transparency. The company balances high yields, with target overcollateralisation of around 2.2x, and importantly the structure ensures healthy cash flows prioritising debt investor repayment. I’m looking forward to working closely with the Alt Lending team in the months and years to come.’’
Expanding Access to Private Credit
How will this partnership benefit Kingsbury & Partners’ clients?
Through this partnership, clients gain access to a Credit Linked Note (CLN) tied to private U.S. student loans. Key features include:
- Attractive Risk-Adjusted Returns: Loans are acquired at 15-50 cents on the dollar, with reperforming loans resold at 70-90 cents on the dollar.
- Portfolio Diversification: Exposure to a niche, high-potential asset class within private credit.
- Collateral-Backed Security: All loans are secured within a bankruptcy-remote SPV (Special Purpose Vehicle).
How will private credit fuel Alt Lending’s growth?
The capital provided by Kingsbury & Partners allows Alt Lending to acquire loan portfolios at steep discounts, leveraging private credit’s flexibility for rapid portfolio expansion.
Highlights of the Opportunity:
Structured by our in-house team in collaboration with Alt Lending, investors have the opportunity to invest alongside Kingsbury & Partners.
- Total Raise: 15,000,000 USD
- Return: 13% annual return (6.5% biannually)
- Minimum Investment: 50,000 USD
- Maturity: fixed maturity of February 2027
- Ranking: First Charge, secured debt
- Security: First charge over the ongoing portfolio of US student loans. Minimum 2:1 asset-to-debt ratio
- Subscription: Delivery-vs-Payment, ISIN
Interested in learning more?
Contact us today to explore how this partnership can support your financial goals. Stay updated by signing up for our newsletter or following us on LinkedIn.
