Asset-Based Lending vs. Asset-Backed Finance: Decoding the Next Frontier of Private Credit
Asset-Based Lending. Asset-Backed Finance. This corner of private credit is attracting growing attention as the next frontier beyond corporate direct lending. Yet in industry discussions, the two “Asset-B” terms are often used interchangeably—creating confusion where important distinctions exist.
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For investors seeking to build diversified private credit portfolios, understanding how Asset-Based Lending (ABL) and Asset-Backed Finance (ABF) differ in structure, risk, and return is essential.
In this AFA Perspective, we explore:
- The key differences between ABL and ABF
- The underlying economic dynamics, and
- What investors should consider when evaluating these strategies
You can download the paper here.
Disclosures
This AFA Perspective was prepared by Alternative Fund Advisors, LLC (“AFA”). AFA does not make any representations or warranty, express or implied, as to the information’s accuracy or completeness, nor does AFA recommend that the information presented serve as the basis of any investment decision. The views expressed reflect the current views as of the date hereof. This publication has been provided solely for information purposes and does not constitute an offer or solicitation of an offer or any advice or recommendation to purchase any securities or other financial instruments and may not be construed as such.
AFA is the investment adviser of the AFA Asset Based Lending Fund, a continuously offered closed-end interval fund. An investment in the Fund involves risk. The Fund’s investment in private credit securities is speculative and involves a high degree of risk, including the risk associated with leverage.
Read the prospectus carefully before you invest. Investors should carefully consider the Fund’s investment objectives, risks, charges and expenses before investing. This information is contained in the Fund Prospectus and a copy may be obtained by calling 800-452-6804 or by clicking here.
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