A10 CAPITAL VS DISTRESSED DEBT FUNDS
A10 Capital's approach to buying bank loans is very different than large Wall Street distressed debt funds. These are just a few of the differences:
DISTRESSED DEBT FUNDS BUY LOANS AT STEEPER DISCOUNTS
In order to achieve their high return hurdles, most large distressed debt funds must acquire loans at steep discounts and focus primarily on non-performing loans. A10 Capital, on the other hand, focuses on performing / sub-performing loans that simply need more time to achieve stabilization. As a result, A10 Capital can often provide a bank with a more attractive purchase price on these loans as opposed to selling them in non-performing loan pools.
DISTRESSED DEBT FUNDS USUALLY BUY BULK LOAN PORTFOLIOS
Many large distressed debt funds have to put hundreds of millions in capital to work in order to meet the fund's investment objectives. Consequently, many large distressed debt funds are usually only interested in buying portfolios in bulk. In contrast, A10 Capital is organized to acquire, and is perfectly content purchasing individual loans.
DISTRESSED DEBT FUNDS CARRY LARGE OVERHEAD
Many large distressed debt funds carry large overhead because they are managed by high-priced Wall Street investment bankers and executives. Their overhead structure must be factored in to the discount on their loan purchases. A10 Capital is headquartered in Boise, Idaho and operated by entrepreneurs and former bankers who are cost-conscious. Our low overhead structure makes us more competitive and better suited to meet the needs of local and regional banks.
DISTRESSED DEBT FUNDS FOCUS ON LARGER CITIES
Many large distressed debt funds will only purchase loans that are located in major metropolitan areas. A10 Capital is capable of buying loans in smaller communities and we have local loan officers who understand these regional markets.
MOST DISTRESSED DEBT FUNDS DON’T HAVE ORIGINATION CAPABILITY
Many large distressed debt funds do not have direct loan origination capability. A10 Capital, by contrast, also originates loans and therefore can buy bank loans with short maturities, with an eye towards renewal at maturity. As a result, we give the borrower the opportunity to execute their stabilization plan and return the loan to a conventional source. Our longer-term strategy usually enables us to provide a higher purchase price than large distressed debt funds, which often resort to foreclosure as their only way to realize their return objective.
DISTRESSED DEBT FUNDS ARE USUALLY RUN BY INVESTMENT BANKERS
Many large distressed debt funds are owned and operated by Wall Street investment bankers. Many investment bankers have a reputation for being cut-throat and shrewd. A10 Capital is headquartered in Boise, Idaho and operated by entrepreneurs and former bankers who live and die by long-term relationships. We understand banking and we’re committed to service that supports you and your banking relationships.