Fintech Capital Markets - Sector Growth/Exit Opps/Thoughts
Hi all - hope everyone is well!
Recently, there has been a rise in Fintech involvement in the Capital Markets space. Namely, there has been an explosion in $multi-bn committed capital deals in the Consumer Unsecured originator realm (Think: Affirm - $4bn deal with Sixth Street, Upstart - $4bn deal with Castlelake) wherein Private Credit specialty finance teams will agree to purchase a preset amount of loans from these fintech companies on a forward flow basis. Funding strategies for these deals vary and can be bespoke, encompassing anything from back leverage through a bank warehouse facility, regular securitizations or specialty financing (mezz lending through a KKR esque player, etc.). Many firms will also directly commit to purchase loans on an unlevered basis, typically subject to protection/return g'tees.
I'm involved in this space myself - after 2+ years in BB IB Structured Finance, I have spent the last 2 years of my career in an in-house fintech Capital Markets team. While the developments in the sector have been exciting, there's a dearth of WSO forums addressing this specific niche of the industry, and I'm curious to hear more.
Those who are in the space - how are you feeling about it (WLB/compensation/lifestyle/deal flow)? What are potential Exit Opps for people working within the space? Those who are on the fund/bank side of the equation, how is working with these companies?
Happy NYE!
Articles:
https://www.cnbc.com/2024/12/13/buy-now-pay-later…
https://www.castlelake.com/article/castlelake-agr…
Based on the most helpful WSO content, the Fintech Capital Markets space is indeed an exciting and rapidly evolving niche. Here's a breakdown of insights related to your query:
Sector Growth:
Work-Life Balance (WLB), Compensation, and Lifestyle:
Deal Flow:
Exit Opportunities:
Thoughts from the Fund/Bank Side:
For further insights, you might find these articles helpful:
- Affirm's $4bn deal with Sixth Street: https://www.cnbc.com/2024/12/13/buy-now-pay-later-company-affirm-strike…</a">CNBC Article
- Castlelake's $1.2bn purchase agreement with Upstart: https://www.castlelake.com/article/castlelake-agrees-to-purchase-up-to-…</a">Castlelake Article
Happy New Year!
Sources: What Field Are You And in What Broad Region?, Venture Debt/Lending Industry and Career Opportunities, Is tech all that or nothing more than a buzz word?, Credit Hedge Fund opportunities, Credit Hedge Fund opportunities
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