Pemberton announces it has raised US$1bn for its Working Capital Finance strategy
Overview
Pemberton, a leading alternative credit specialist, has raised US$1bn for its Working Capital Finance (WCF) strategy.
The WCF strategy invests in receivables, payables and inventory financings for large and mid-market companies in both the US and in Europe through an open-ended fund structure. The companies Pemberton invests in span a wide range of sectors, with a focus on IT and food businesses.
Pemberton believes it is one of the first asset managers in the world to offer a short-term alternative credit strategy to institutional investors. It believes the strategy offers a stable NAV and strong returns compared to traditional fixed income assets.
Pemberton’s dedicated WCF investment team comprises 10 senior professionals, including six Managing Directors, who are responsible for sourcing, structuring and underwriting the assets for the strategy.
Recent hires include Oren Bass as Head of Origination. Oren is responsible for sourcing WCF assets for the strategy globally and brings over 20 years’ experience in alternative lending and private debt. Prior to joining Pemberton, Oren was CEO of FIBR Bank (previously Amsterdam Trade Bank) where he was responsible for transforming the bank into a pan-European digital lender focused on SMEs. He also founded pioneering digital lender Pave, which he scaled across the United States, and previously worked at GLG Partners and Goldman Sachs.
Demand for working capital financing has grown strongly, with working capital used by corporates rising 17% from €4.6tn in 2020 to €5.4tn in 20211, and the market for financing forecast to continue growing over the coming years2 . Banks remain the dominant players in the market, but Pemberton believes institutional capital has an increasingly important role to play in several segments of the market that are underserved by the banking community.
The WCF strategy is zero duration and very low volatility, having been zero default and zero loss since inception.3
1.Working capital used by the largest 18,000 global corporations rose 17% from €4.6tn in 2020 to €5.4tn in 2021.
Source: Page 5, Working Capital Study 22/23, PwC – https://www.pwc.co.uk/business-restructuring/pdf/working-capital-report-2022.pdf
2.Supply chain financing and other open account financing are forecast to increase at 6.2%-8.6% pa from 2022 to 2031.
Source: Page 13, ICC Trade Register 2022, ICC/BCG
3.Past performance is not a reliable indicator of future results.
This milestone demonstrates growing LP interest in working capital finance and its ability to offer compelling returns in volatile market conditions.
We believe non-bank capital will play an increasingly important role in short-term corporate financing and that the investments we have made in our team and our proprietary technology platform will enable us to grow the strategy to over $10bn AuM over the next five years.
– Mark Hickey, Head of Working Capital Finance
Our Working Capital Finance strategy extends Pemberton’s range of investment strategies to include short-term corporate credit. It leverages our core strengths as a fundamental credit manager, whilst providing our LPs with another complement to our established direct lending strategies.
– Symon Drake-Brockman, Managing Partner
About the authors
Symon Drake-Brockman
Managing Partner
Mark Hickey
Partner, Head of Working Capital Finance
