Introduction

In the world of private capital, backing the right people matters just as much as backing the right businesses. At Kingsbury & Partners, our approach to sponsored finance reflects this simple principle: we back the backers.

From private equity sponsors to family offices, sponsored finance plays a vital role in unlocking growth for businesses that may not yet have the scale or track record to access traditional funding lines. It is often the marriage of equity and credit sponsors that drives the growth of these businesses.

What is Sponsored Finance?

Sponsored finance refers to debt financing that is underwritten for businesses with the support of a financial sponsor—typically a private equity firm, venture capital investor, or family office. The sponsor provides not only equity capital but oversight, operational input, and alignment of interests. In turn, lenders such as Kingsbury & Partners provide credit facilities that would not otherwise be available to the underlying business.

Whether it's for acquisition finance, growth capital, or debt restructuring, sponsored finance solutions are structured with the sponsor's objectives in mind—while ensuring prudent underwriting at the borrower level.

Sponsored lending now represents over 60% of total private credit issuance in Europe, according to PitchBook.

Private Credit Rides on PE Discipline

Private equity sponsors seek asymmetrical, outsized returns through operational transformation, bolt-on acquisitions, or market expansion. Their equity is inherently subordinated to our credit—sitting below us in the capital stack—meaning our capital benefits from downside protection, while theirs is geared to performance. This alignment allows private credit providers like Kingsbury & Partners to target steady, risk-adjusted returns while knowing the sponsor is fully committed to driving value creation above our position.

When its Time to Scale

By the time Kingsbury & Partners is involved, we’re not funding lofty ideas or unproven concepts. We’re backing a business model that works: funding cash-generative assets, particularly loan books.

Our role is to help scale that model. We structure credit around the asset base—receivables, loan books, leases, or recurring revenue. This is asset-based lending with defined risk and attractive upside not venture-style risk.

In this context, sponsored finance isn’t about betting on potential. It’s about accelerating growth, with our capital sitting above the sponsor’s equity and secured against something real.

Why We Back the Backers

At Kingsbury & Partners, much of our activity sits at the intersection of private equity-backed businesses and non-bank financial institutions (NBFIs). We’ve found this intersection to be fertile ground for structured, asset-backed credit.

Firms with PE or family office sponsorship bring a set of institutional qualities that make them ideal borrowers for credit providers like us:

  • Professional governance structures
    PE-backed companies typically have independent boards, audit oversight, and institutional reporting—creating the transparency we require when deploying capital through structured credit.
  • Operational improvements
    Sponsors bring portfolio-level expertise in systems, compliance, cost control, and risk management. These enhancements reduce default risk and improve creditworthiness.
  • Long-term capital commitment
    Equity sponsors are in for the medium-to-long term, which brings strategic stability. For credit providers, this provides comfort that our capital won’t be undermined by short-term exits or founder fatigue.
  • Strategic networks and access
    PE-backed businesses benefit from board-level contacts, M&A opportunities, and sector-specific insight. This improves resilience and opens up risk mitigation levers during periods of volatility—vital for NBFIs that manage loan books or deploy leverage.

Our credit strategy has a strong focus on well-governed NBFIs. When such businesses are PE-backed, we get the best of both worlds: institutional-grade discipline and entrepreneurial growth.

Case Study: Alt Lending and KG Investments

An example of our sponsored finance approach in action is our support of Alt Lending, a specialist lender in the distressed US student loan market. Alt Lending acquires and restructures defaulted private loans in the United States, offering borrowers a second chance and investors an attractive yield.

What makes this opportunity viable? The backing of KG Investments, a US-based private equity firm known for its disciplined, data-led approach to thoughtful investments in early-stage businesses in markets of dislocation and mispricing. KG Investments has a varied experience across sectors having invested (and, vitally, exited) numerous companies including Facebook, LinkedIn and Alibaba Group (2006), Flipkart.com (2010), Pinterest, Spotify, SurveyMonkey, Lyft and Instacart (2017), and Njoy and Ripple (2019), alongside many other companies. You can view full portfolio of companies here: https://www.kginvest.net/

With KG’s sponsorship, Alt Lending benefits from strong governance and a robust funding roadmap. For us, this provided conviction not only in the borrower’s model but in the people driving it. The result: a structured credit facility aligned with the needs of both the business and its backers.

Watch our recent interview with the equity sponsor, Giles Sommerville, of KG Investments here.

Final Word

Sponsored finance sits at the core of our credit strategy because it combines what we value most: strong alignment, proven models, and downside protection. When a credible sponsor has already put capital at risk and helped build a viable business, we’re well-positioned to step in and scale it through structured credit.

For firms like Alt Lending, backed by experienced investors such as KG Investments, this approach provides the best of both worlds—non-dilutive funding with institutional rigour. And for our investors, it means predictable returns with risk that’s priced, monitored, and secured.

Sponsored finance allows us to back the backers—and build something scalable.