Flock Advisors announced public availability of the firm’s Falcon Fund, adding to the options available to debt buyers for funding debt purchases, according to Michael Flock, the company's managing director.
The Falcon Fund, which in its first round has received approximately $20 million in commitments from high net-worth individuals, provides funding to middle market debt buyers seeking to take advantage of favorable market conditions, but unable to find funding from traditional sources,
The Falcon Fund will finance 85% of the purchase price for debt buyers who spend $1 million or more annually for charged-off portfolios. Flock Advisors traditionally helps firms sell and buy other companies and provides assistance with raising capital.
“With prices returning to attractive levels, there are lots of deals that are starting to make sense if the buyer can get reasonable funding," says Flock. "With Falcon, we are providing experienced middle market debt buyers with funding that is fair, flexible and fast."
Borrowers must have a healthy collections record, an experienced management team and strong financials. Unlike many funds, the Falcon Fund will not require personal guarantees or exclusivity. It offers an innovative "pari passu" structure, in which the debt buyer is paid in parallel with the investor through distributions in proportion to their respective investments. This model provides cashflow earlier to the debt buyer.
"I think the market is hungry for this type of funding," says Stacey Schacter, president of Vion Receivable Investments, a buyer of consumer and commercial debt portfolios. "There are a lot of savvy buyers out there who would do more deals if they could find reasonable funding terms. We have encouraged our buyers to seek out funds like Falcon."
Adds Bob Morris, founder of debt buyer Oliphant Financial, who previously used the Falcon Fund for a transaction, "It’s been a very challenging environment to find reasonable funding opportunities in a market like this."
Firms interested in learning more about the fund should contact Michael Flock at 770.644.0851, or Don Hilbert at 770.644.0852.
