Atlas Merchant投资Edge Focus，拓展消费信贷市场

I want to first get to the investment in Elliott. Let's talk about this investment. What does this equity investment specifically do for you? It has to do with like operations doesn't it? It does. The important thing for us is being able to go into more asset classes and really invest in alongside of our partners what we do, as you mentioned, Carol, is uh, provide, uh, capital as well as access as well as, um, several other things of the consumer lending market.

And we're ultimately looking to do is a massive market by the huge market, $200 million, an unsecured consumer last year. Uh, we're trying to connect, at the end of the day, big investment firms like a fortress with really large, um, consumer lending firms, like a SoFi. Yeah. Bob, come on in on this investment. There's a lot of noise around credit markets, around private credit right now in particular, it's you have a very diverse portfolio at Atlas Merchant Capital.

Why make this investment right now? You know, we have seen a real unbelievable development in the credit market since 2008, the great financial crisis. And I think. So much of credit ended up on bank balance sheets prior to 2008, particularly outside the US. You know, the the, the, the the big banks and France, the big banks in the UK, all the credit was on the bank balance sheets. And we have seen a real development.

Some call it private credit. You know, it's edge focus. Um it's fortress uh, there there's so much diversification. And I think that's why we have had such a long period without a real blip in credit. It's it's become, you know, it's a real credit to the U.S. capital markets. Um, I think in terms of consumer credit. And I saw this, you know, through the lens of Barclays, I saw it very much through Barclaycard, which dominated the credit card and consumer credit market in the UK, is again, it's much more diverse.

It can be spread a lot. Um, and I think we have originators of consumer credit like SoFi in edge Focus. Uh, we have capital that likes to invest in consumer credit, like fortress. And I think one of the things that we can do together is we can find more, um, originators, we can find more investors. Um, and, you know, when we look for an investment, you know, you want to have someone that has a unique position in their market that's edge focus.

You want to find someone that has strong leadership. That's Elliot and the team. You want to find a business that's profitable. But most importantly for us, you want to find a business that has both a willingness and ability to grow. And this can be a significant increase over the next three or 4 or 5 years with access to capital to grow this business. So it's unusual in financial services to look at investments where they can be multiples, um, of where they are today.

Uh, but what Elliot and the team have built can be multiples of this. Um, it's a big market. You mentioned unique focus that Elliot has and his team. What is that unique focus? Elliott. Because the consumer credit market, a lot of players, a lot of folks in there, what is it that you guys are doing differently? And I'm curious than like what you think they're doing differently that's appealing. We do three things really well.

We have access to a ton of data, our modeling approach, and then access to various other consumer lenders. From a data standpoint, hundreds of billions of data points in the US consumer across lots of platforms. We know really well at all times what the consumer. Where's that data coming from? Uh, two main sources from platforms themselves who issue loans, as well as the credit bureaus, lots of other alternative data sources as well.

From modeling standpoint, we have PhD researchers where all they do every day is research how to model the consumer, see what the latest trends are, and then finally access. None of this matters unless you have really good access across lots of different platforms. Bob, is there one more thing you have? Incredible. This is someone who did, I think, the due diligence. We did a lot of work on having a credible discipline and both the originators and the providers of capital love what they see here because of the discipline with their own capital, but also with their advice and counsel.

So it's an underwriting, but also an advisor. Does that mean only certain types of consumer credit that you're going to like certain categories, certain types of like. Tell us, is it top tier? Like what are you going for? We look across the board. Generally speaking, we can provide the most value in near prime and subprime credit. Near prime minister. Okay. So on that Elliott sofa and happy money are two you know existing deals that are Bloomberg news team has reported on.

Would you would you think about expanding to I don't know of the other places like buy now pay later firms for example. Absolutely. I think it's part of the reason for the investment. We want to grow beyond unsecured, which will really begin. Right now we're getting much bigger and auto. We want to be in point of sale medical. We want to be in home improvement. There's a ton of areas for us to grow into. What are some are you are you talking right now to any specific buy now, pay later firms or any of those firms in the spaces that you just mentioned right now.

Many of them. Absolutely. So we should expect deals. We should expect deals to be. Absolutely. Our LPs are asking for it as well. Okay. It's got really neat characters. Do you think that do you think that you're gonna have a pretty big announcement in about two weeks? So I love this. So all right. But you guys got come back date. But that's appealing to you that part of the market. You know Carol as I said yeah it's about a unique position which they have.

It's about strong leadership. It's about profitability. But most importantly what we love is we're not just great investors were great operators. We love to roll up our sleeves, go out and visit clients, help them think about expansion. And when you look at a business that is this disciplined and this profitable and this focus with the market out there and consumer credit and beyond consumer credit, it's just this is exactly the kind of investment that gets us up in the morning.

Well, so then what are you going to do Bob for Elliott and his team? You know, you say to you guys like to roll up your sleeves, you're making this injection of capital. You're now a minority owner in the firm. That's just the beginning, right? Do you have an answer? Most. When Carol and Tim call, I come here. I like that, and maybe. I mean, they're in Denver, so maybe you could go do some skiing this winter. It's out in the ether now.

So, um. But. Yeah. How involved? Like, it sounds like good old fashioned trust is a great partner. Yeah. There are other institutions that, uh, David, Seamus and I and Brian Saunders have been very close to over the years, and other investments are in our career. And, you know, David was with, uh, with, with JC flowers and my time at Barclays. We know a lot of people that would be interested in being capital providers, but until now they have not heard about Edge Focus and they have not heard about the business model.

Who are the investors already involved with you? What other investors might be coming at you? You talk about the capital providers. Like who? Who are we talking about? All the really large private credit firms you've probably heard of. Like I said, we've talked about Fortress Bubble quite a bit, several others as well. Okay. So more. Yes, more. You know, I noticed in the press release that that this is focused on hiring efforts to part of this injection of capital, partly focused on hiring efforts to to build out, uh, a big part of your team.

I'm curious about talent that your firm is targeting in a market that's really, really competitive, incredibly competitive market. The biggest thing for us is hiring researchers. Um, especially in the age of AI, making s