Portfolio Development and Investor Implications

This December update builds on the September report and focuses more directly on portfolio construction, seasoning, and realised performance across Alt Lending’s growing book of distressed private US student loans. With limited incremental macro commentary this quarter, the focus has shifted decisively toward what the recent acquisitions reveal about pricing discipline, portfolio behaviour, and embedded value for investors.

Through our private credit facility, Alt Lending continues to deploy into distressed, delinquent, and defaulted private US student loans, acquired at deep discounts to face value and serviced through specialist partners. 

Portfolio Snapshot

(Loan tape dated 31 December 2025)

As at 31 December 2025:

  • Number of loans: 1,941
  • Aggregate original loan balance (face value): c. $10.1M
  • Aggregate purchase price paid: c. $439,000
  • Average purchase price: ~4.39 cents on the dollar
  • Average outstanding balance per loan: ~$5,500

The portfolio is intentionally granular, with no meaningful borrower-level concentration. Performance is therefore driven by portfolio-level recovery dynamics, rather than reliance on individual outcomes.

Acquisition Pricing and Margin of Safety

The defining feature of SPV Two is its entry pricing.

With loans acquired at an average of approximately 4.4% of face value, the portfolio embeds a substantial margin of safety before servicing outcomes, restructuring success, or borrower re-performance are considered. Even modest cumulative recoveries, when measured against capital deployed rather than face value, can translate into highly asymmetric returns.

What SPV Two Now Demonstrates

For investors in the Kingsbury & Partners–sponsored Credit Linked Note, the December loan tape reinforces several key points:

  • Entry pricing remains exceptionally conservative, with capital deployed at a small fraction of face value.
  • Portfolio scale is now meaningful, allowing performance to be assessed statistically rather than anecdotally.
  • Granularity materially limits downside risk, even in adverse borrower scenarios.
  • Return asymmetry remains intact, driven by acquisition discipline rather than optimistic recovery assumptions.

Outlook for SPV Two

Alt Lending will continue to scale SPV Two selectively, maintaining conservative purchase prices and working closely with specialist servicers to optimise borrower outcomes and recoveries.

As seasoning progresses, the relationship between cumulative collections and capital deployed will become increasingly transparent. Kingsbury & Partners will continue to provide SPV-specific reporting, ensuring investors retain clear line-of-sight into portfolio behaviour as SPV Two matures from deployment into cash-flow visibility.