ColCap climbs into private credit

In yet another sign of the attractiveness of the private credit space, significant non-bank lender, ColCap has taken a 14% stake in Revolution Asset Management.

Describing the transaction as a “strategic partnership”, the two companies said that under the arrangement, ColCap would acquire the minority 14% shareholding in Revolution while Channel Capital would convert its existing interest into a 25.8% shareholding.

It said that Revolution’s investment team would retain majority ownership, “ensuring continuity of leadership, strategy and alignment of interest with investors.

The announcement noted that ColCap currently manages over $19 billion in assets under management, while Revolution oversees more than $3 billion in funds under management.

Commenting on the transaction, ColCap chief executive, Andrew Chepul said the investment reflected the firm’s commitment to expanding and diversifying its investment platform.

“Revolution’s disciplined credit approach and strong institutional relationships complement our strategic vision and operational strengths in origination, which will add scalable funding diversity as we transition towards a broader asset management focus, less reliant on securitisation funding sources,” Chepul said.

Revolution managing director, Bob Sahota said the partnership marks a milestone for the business combining Revolution’s established private credit funds management expertise with ColCap’s strong origination and lending capabilities focusing on high quality lending.

“This strategic investment further diversifies our origination pipeline and deal flow by leveraging ColCap’s established lending platform and track record to expand our access to high quality lending opportunities, enhancing portfolio depth and diversification,” he said.

The announcement said the partnership would enable enhanced origination in institutional grade, Asset-Backed Securities, focusing on mezzanine and senior tranches, whole loans, as well as warehouse facilities.

“These assets aim to deliver regular income, diversification and capital protection, without exposure to subprime markets,” it said.

ColCap’s Co-Founder and Chief Operating Officer Ilias Pavlopoulos said the move reflects ColCap’s deliberate investment to become a diversified non-bank lender.

“We’re a genuine mortgage origination leader, having spent the last almost 20 years delivering product innovation challenging bank and competing non-bank lenders, providing borrowers with choice and trusted prime mortgage alternatives.

“We believe now is the right time to leverage strategic investments and expand beyond traditional mortgages to provide broader asset management offerings for professional investors.

“As one of Australia’s largest non-bank lenders, with growing global operations, ColCap will continue to look at opportunities for growth through strategic investments and acquisitions in complementary markets.”

Channel Capital Group (Channel) provides institutional-grade non-investment services to Revolution, including operations, client service, distribution, and marketing.