Understanding Collateral Beyond Valuation In private credit, the significance of collateral is well recognized. Investors expect seniority, security, and a clear claim on assets. Given this assignment of collateral, asset-backed lending is intended to create more consistent outcomes across market cycles. Collateral is often described in simple terms. It exists, or it does not. It has a value, or it…
Where Opportunity Exists in Private Credit In recent years, several charts and league tables have circulated illustrating the growth of private credit. They often compare managers by assets under management, highlight the concentration of capital in the United States and Europe, and suggest where scale has accumulated. These visuals are helpful. They illustrate that private credit has become a permanent…
Where Private Credit Fits in a Portfolio For decades, the 60/40 portfolio has been the standard framework for long-term investors. Equities were expected to drive growth, while bonds provided income and stability. That structure has endured because, over long periods, it has worked. What investors have also seen is that the diversification provided by traditional assets has not been consistent…
The Liquidity Advantage: What Investors Gain by Thinking Beyond Daily Access At Garrington, we view liquidity not as a limitation, but as a strategic advantage when it’s planned, transparent, and aligned with the underlying tangible assets. The question we often hear “If I can sell a bond fund any day, why would I tie up capital in private credit even…
Why Businesses Borrow Beyond The Banks We are often asked, “Why would businesses with strong collateral pay 12 to 15 percent per annum—or more—to borrow from us? What’s the catch?” In our view, there isn’t one. When structured and managed with discipline, senior-secured, asset-backed lending to smaller mid-market borrowers offers one of the most compelling risk-adjusted return profiles available to…
Tricolor – When Incentives Overrun Controls The bankruptcy of Tricolor Holdings has drawn global attention to subprime auto finance. Tricolor was a Dallas-based used car dealer and subprime auto lender serving borrowers with limited credit history. It operated at the intersection of retail car sales and consumer lending, a model that can blur incentives when sales and underwriting sit under…
First Brands – When Financing Signals Distress The recent bankruptcies of First Brands Group, a U.S.-based automotive parts manufacturer, and Tri-Color Holdings, a subprime auto lender headquartered in Dallas, have drawn global attention to the private credit and specialty finance markets. Both companies operated in sectors familiar to alternative lenders, and both collapsed amid allegations of irregular financing structures, poor…
When “Boring” Wins: Lessons From Recent Industry Bankruptcies The recent bankruptcies of Tri-Color and First Brands have caught investors’ attention and sparked questions about the health of certain corners of private credit. Both companies operated in areas that overlap with strategies often used in specialty finance, subprime auto lending, and factoring. On the surface, their collapses could be interpreted as…
Lender Finance, Revisited: A Portfolio Inside a Portfolio Some subjects are worth returning to. We’ve written about lender finance before, but like any good portfolio, the more you study it, the more it reveals. Lender finance is not just a sector in which we participate. It’s a strategy that continues to exemplify what we look for across our entire book…
What’s Beneath the Surface: A Closer Look at How We Lend Transparency is often promised but rarely practiced. At Garrington, we aim to be the exception not just because it’s good investor relations, but because we believe trust compounds, just like returns. In our latest investor call, we opened the curtain on some of the larger facilities within our portfolio.…
