SCIO targets a market niche, allowing us to negotiate better terms and pricing for our loans. As these markets are small, they have less competition. They are more complex than corporate lending, thus requiring specialist knowledge. These two aspects serve as a barrier to entry for new competitors. Larger entities also find them unappealing due to their size. This allows us to utilize the niche and provide exceptional returns to our investors.

Thinking of private credit? Usually, corporate lending will come to mind. It can take several forms, either a loan from a bank or an issuance of debt into the market. But there is a key problem with this product: it relies on future profits from the borrower to repay the loans. If the firm is unprofitable, the loans will not be repaid in full, or at all.

We minimize this risk for investors by focusing on asset-based lending. Assets secure the loan. Even if a borrower is unprofitable, we can sell the collateral for repayment. Thus, investor capital is protected.

Funds usually target private asset-based loans or asset-backed securities. Rarely both. Why? Because private lenders hardly have the required expertise to navigate public markets. They are either bankers or lawyers, not traders who have the expertise to source, structure, and underwrite private loans.

We have both, allowing us to participate in both public and private markets. As we have expanded our range, we have gained a competitive advantage, from which our investors benefit.