Q&A: Asset-based lending funds

Now that many traditional lenders are tightening their lending criteria, is an opportunity arising for asset-based lending funds to fill this gap? Credit speaks to leading ABL managers to find out. Answers by Josh Zegen of Madison Realty Capital, David Grin of Laurus-Valens, and Martin Sands of Sands Brothers Asset Management

Asset-based lending (ABL) strategies have been gaining popularity at an impressive rate recently, and with good reason. Money has poured into the strategy in search of the low volatility and steady return stream that a well-run fund can generate. Additionally, since the return stream is tied directly to individual loan repayments, correlation to equity and debt markets is relatively low.

Though there is some variation, ABL funds originate loans which are backed by collateral, usually the assets