A LOOK BACK
A LOOK AHEAD
A LOOK BACK A LOOK AHEAD
2020 was a foundational year for Percent. Take a look back at our first full year as a platform — and everything amazing that happened along the way.
2020 was a foundational year for Cadence. It was the year of perseverance, transformation, and, above all, growth. We truly came into our own in 2020, even amidst a global pandemic and the growing pains a young company like ours faces in its early days.
We adapted to market conditions and demands, built platforms made to scale, and pursued lofty goals once believed to be too ambitious. Despite the challenges facing any young, growing company, we vastly exceeded benchmarks we didn’t expect to hit for some time. We saw exponential year-over-year issuance growth, a record number of new investors, numerous new partnerships with originators, and expansion beyond the retail investing world and into the institutional realm.
2020 was the year we validated our hypotheses around the market, where we captured the pulse of what investors wanted, and proved our very need to exist. Private debt is an unstructured free-for-all and with standardization, normalization, and innovation; we believe we can accelerate the growth of this market like never before.
This is never more clear than what we were able to do with Wall Street Funding, one of our first originator partners. Beginning with just a small $1.5M note in July 2019, we managed to steadily grow that to over $16 million on our Retail platform before graduating them out to institutional markets. $16 million became $60 million across two transactions, more than tripling their debt capacity and making them the perfect case study for what we can do to transform originators to be institutionally ready.
We also acted as the sole structuring agent for FAT Brands (NAS: FAT) in a $40 million whole business securitization in March 2020 that the market had never seen before. Though this was conventional in structure as a whole business securitization, the terms and the issuer were anything but. FAT was going to market for the very first time with a non-investment grade rating and a deal size under $100 million. Even still, this deal proved to be so successful that we managed to successfully close on an unrated subordinated tranche in September 2020 for an oversubscribed $40 million that was used to acquire Johnny Rockets, the iconic restaurant franchise.
These transactions were a multitude of industry firsts: the first ever high-yield rated whole business securitization, the first ever note underwritten by a major investment bank, the first follow-on offering to a whole business securitization via an unrated subordinated tranche, and the first whole business securitization raised for acquisition financing.
We are now 28 strong with more industry experience than ever. In 2020, we made several key hires, including Surat Maheshwari, a former Managing Director at Nomura, Oppenheimer, and Citi, and Rohit Bharill, the former Head of ABS and CLOs at Morningstar. 2020 concluded with $308 million in transactions across 16 originators, and 2021 is shaping up to be even bigger.
2020 was the year where we proved we are well on our way to achieving our vision of becoming not just a leading name in the alternative investment world, but the definitive platform for private debt. It was a foundational year that defined us, and now we simply can’t wait for what 2021 will bring.
TOTAL AMOUNT INVESTED IN 2020
(That's over 4x the amount invested in 2019)
Number of originators
Total interest paid
Total number of investments
Average deal size
Number of investors who have participated in at least two deals
A few of our highlights...
With Wall Street Funding, Percent has successfully scaled its first originator from the Retail platform and into institutional markets as a first-time issuer.
Together, an institutional and Percent Prime's transaction have tripled Wall Street Funding’s origination capacity as the industry recovers from the COVID-19-induced downturn.
In March, Percent acted as the sole structuring consultant and arranger on a $40M institutional offering for FAT Brands, upsized from the initial target of $30M.
Percent acted as the sole structuring agent on our second institutional securitization, another $40M offering for FAT Brands in September.
In completing this transaction, we were able to help the company acquire the iconic Johnny Rockets franchise.
COVID-19 increased the importance of timely data in monitoring and surveillance, and so Percent rolled out Surveillance Reports for each originator partner over the course of 2020.
Surveillance reports provide investors with frequent updates on how underlying loan portfolios are performing, enhancing transparency in otherwise opaque private credit markets.
As market volatility spiked this Spring, Percent launched a Dutch Auction feature on its Retail platform.
This auction system, a standard in the institutional credit markets, greatly enhanced Percent's ability to discover market-clearing yields for our offerings.
Dutch auction participation helps investors price offerings, and investor participation in the auctions has risen steadily throughout the year.
Meet a few of our originator partners...
Just some of the recognition we received in 2020...
"Morningstar Rates First Ethereum Security in $40M Fatburger Deal"
"Cadence CEO Nelson Chu Named to PDI’s 'Rising Stars 2020' List"
Securitization platform Cadence surpasses $125M deal volume
and raises $4M
"Nelson Chu Featured on Debtwire Podcast"
"Cadence Raises $4M for its Private Credit Investment Platform"
We put together all of our 2020 highlights, as well as outlooks for 2021 in this yearbook, available to download for free.