Founded in 2021, Nebula Capital Partners LTD (“NCP”) is a UK based investment advisory company that focuses on sourcing, underwriting, structuring and managing investments in portfolios of granular credit assets originated by Western-European FinTech / Digital lending platforms.
|Company Name||Nebula Capital Partners (“NCP”)|
|Asset Type||FinTech / Digital Lending|
|MIP 6 Application||NCP01-DROP|
Please give a brief history of the company and, if applicable, group structure.
NCP was established by Markus Hunold in 2021 with the aim of bridging the funding gap between non-bank FinTech / Digital lending platforms and the decentralized finance ecosystem.
Please give an overview of the legal structure.
NCP, in its role as investment advisor is an UK incorporated private limited liability company. In order to be an attractive partner to institutional-grade European asset originators and to be able to efficiently implement transactions at scale, it is NCP’s intention that the tokenization transactions are implemented within a well-established regulatory securitization framework in an international recognized financial center in Europe. These asset pool specific securitization SPVs will be structured as bankruptcy-remote entities with NCP being the 100% shareholder.
How many full-time equivalent team members do you have and what do they do?
NCP’s team is currently being build out and is led by Markus Hunold, who has highly relevant experience in successfully leading similar transactions. Markus resides in London (UK) and has more than 14 years of relevant experience in the financial services and investment management industry covering private credit, private equity and investment banking. His experience include roles at KKR & Co Inc. (more than 8 years), Goldman Sachs Group, Inc. (3 years; Private Equity & Private Credit / Merchant Banking) and Citigroup Inc. (3 years; Mergers & Acquisitions). Most recently and up until January 2021, Markus was a Director in the KKR Credit team in London, leading KKR’s private credit efforts in the DACH region (Germany, Austria and Switzerland). His responsibilities included sourcing, underwriting and monitoring activities covering the whole spectrum of private credit products: direct lending (senior / opportunistic), structured credit as well as special situations. Furthermore, he acted as Staffer for the broader KKR Credit team in London and as Special Situations sector-lead in KKR’s global valuation committee. In addition to organically building-out its internal team, NCP leverages best-in-class and institutional-grade “as-a-service” offerings for both (i) the operational must-haves (accounting, IT, fund admin) but also (ii) the investment management process (loan-level data extraction / harmonization, data science suite and analytical support)
Have you sold equity? Are you venture funded, if so please describe the previous rounds, money invested, and lead investors.
NCP is 100% owned by Markus Hunold
Is your business sustainably profitable or well funded with sufficient cash runway?
NCP intends to be cash-flow positive at the end of the first 12 months of operation and then scale its operations gradually and in-line with revenue growth. The required start-up and structuring costs are fully underwritten and will be provided by NCP’s 100% shareholder (Markus Hunold).
Describe the asset collateral that you seek to finance.
The underlying pools of credit assets are originated by technology enabled non-bank specialty finance credit origination, underwriting and servicing platforms. FinTech / Digital lending is benefitting from ongoing technological innovation and disruption that provides FinTech / Digital lenders with the ability to better address underserved and/or niche credit demand of the “real economy”. NCP’s targeted sub-segments thereby span the entire spectrum of the real economy - lending to consumers and corporates, property finance and niche sectors such as digital ship and litigation finance. It is NCP’s conviction that the attractive unlevered returns achievable in these sectors via FinTech / Digital lending are the result of superior, technology driven sourcing, underwriting and servicing processes of such FinTech / Digital lenders.
Describe your previous track record related to this business proposal.
During Markus Hunold’s tenure at KKR, the London based Credit team scaled from <10 FTEs in 2013 to 50+ FTEs as of 2021 and the team invested more than ten billion Euros in direct lending, structured credit, and special situation transactions. During that period Markus held multiple board of director positions, had continuous portfolio company oversight responsibilities (positions totaling in access of one billion Euros in market value) and structured a multi-billion credit manager based on a multi-cell securitization set-up in partnership with two major European banks.
What is the average collateral asset size?
Size of individual FinTech / Digital originated credit assets typically range from a couple of Euros to several hundred thousand of Euros and it is the intention to initially securitize portfolios with a net asset value in the range of EUR 1 million to EUR 50 million. However, given the size of the underlying market opportunity (the FinTech / Digital lending market in Europe accounts for approximately EUR 25 billion of annual origination volume and is growing by 50%+ annually) and the demand for attractive fixed income investment opportunities, it is the medium-term goal to eventually grow pool sizes to amounts of several hundred million Euros.
Describe the risk of the assets you are proposing. How do you evaluate and manage that risk?
NCP considers that pools of FinTech / Digital lender originated credit assets are ideally suited for token-based securitization structures. The granularity of the portfolios provides an inherent diversification benefit and creates a certain predictability of investment outcomes (statistical outcomes vs. idiosyncratic individual counterparty risks). Collateral specific risks will depend on the respective (sub-)sector (consumer vs. SMEs vs. property) and NCP will use a state-of-the-art and purpose-build technology set-up for in-house underwriting, monitoring and forecasting processes to efficiently diligence such asset pools and pro-actively manage / re-act to adverse developments in the underlying portfolios. NCP (as well as the respective FinTech / Digital Lenders) will take material positions in the respective TIN tranches by investing proprietary capital to align incentives and provide for “skin in the game”.
Please describe any conflicts of interest or potential conflicts of interest or any relationship that could compromise or be viewed to compromise the decision making of the company.
Are there or have there been in the last 10 years, any criminal, civil, regulatory or administrative proceedings against (i) the Company or any of its principals or (ii) the product in any similar such matters including reparations, arbitrations, and negotiated settlements? If so, please describe.
Are there any further disclosures that interested parties should be aware of?
For each pool of tokenized / securitized FinTech / Digital lending assets NCP intends (i) to charge a investment advisory fee and (ii) to invest in the TIN tranche.