Single-asset secondaries, the latest GP-led wrinkle, are the sale of a sole investment, usually a company. The best offer access to a portfolio gem, typically from an aging fund where incumbent investors want liquidity.
What is a single asset borrower?
Single-asset single-borrower (SASB) loans are very big loans made by very big lenders to very big businesses. It’s a single loan made to a single borrower and collateralized by a single property that then is securitized and sold on the secondary market as an investment to those buyers.
What is a single purpose LLC?
A single purpose LLC is a limited liability company that holds a title to real estate in which the lender who provided financing holds a mortgage but does not have any other liabilities or assets.
What is GP-led secondary?
GP-led secondary transactions typically take the form of either LP tender offers or fund restructurings. New capital (the secondary fund) anchors the continuation fund’s LP base and generally provides LPs in the selling fund the ability to cash-out or rollover their LP interest into the new fund.
What is a stapled secondary?
A stapled secondary sees the new buyer purchase fund interests from current investors, while also making a commitment to the new fund of the same general partner. All these solutions rely on a new investor committing a significant amount.
What is a CMBS loan?
Commercial mortgage-backed securities (CMBS) are fixed-income investment products that are backed by mortgages on commercial properties rather than residential real estate. CMBS can provide liquidity to real estate investors and commercial lenders alike.
What is a debt yield?
Understanding Debt Yield & Its Importance to Lenders Debt yield is the return that a lender would receive if the borrower defaulted on the loan and the lender had to foreclose on the subject property. This is a simple metric used to determine the risk of a proposed loan.
What is a single use property?
The SBA defines a single purpose as: a limited market property with a unique physical design, special construction materials, or a layout that restricts its utility to the specific use for which it was built.
What is an entity purpose?
In general, forming a business entity serves four purposes: (1) protecting business owners; (2) saving taxes; (3) providing certainty and structure to business operations; (4) presenting a professional image to customers and the general public.
What does GP-led mean?
In its most basic form, a GP-led secondary involves existing LPs being given the option to sell all or a portion of their fund interests to the buyer during a binding election period. The fund continues with the buyer as a replacement LP.
When is an asset considered a single asset?
If a law exists that requires the assets to be sold together, and they cannot be sold separately without contravening that law, the assets will be considered a single asset for the purposes of the LRBA provisions.
What makes an entity a single asset entity?
Single Asset Entity means an entity which conforms to the requirements of Section 33 of the Security Instrument. Notwithstanding the foregoing, a Single Asset Entity may own one or more of the Collateral Pool Properties so long as each Collateral Pool Property is subject to the Liens created pursuant to the Loan Documents.
How is risk expressed on a single asset?
Risk on Single Asset: The concept of risk is more difficult to quantify. Statistically we can express risk in terms of standard deviation of return. For example, in case of gilt edged security or government bonds, the risk is nil since the return does not vary – it is fixed.
What are the characteristics of each asset class?
Each asset class is expected to reflect different risk and return investment characteristics and perform differently in any given market environment. Investors interested in maximizing return often do so by reducing portfolio risk through asset class diversification.
