Your Middle Market Partner in
Private Credit Strategies
$10B+
Capital Previously Managed by Principals
50+
Years of Alternatives Investing By Principals
200+
Transactions Closed By Principals
21
Countries with Local Representation
Our Current Offering:
ACOF1 seeks to deliver compelling risk-adjusted returns, with a focus on capital appreciation, by investing in a diversified portfolio of directly originated senior secured loans to U.S. middle market and upper middle market companies.
Our Private Credit Strategies:
Direct Lending
At Adnate Capital, we bring a transformative approach to private credit investing, combining rigorous, data-driven research with disciplined underwriting to deliver customized debt financing solutions while prioritizing credit risk minimization. Our focus lies on identifying high-potential opportunities in upper middle-market companies, whether private equity-sponsored or independently operated, that demonstrate strong fundamentals, stable cash flows, and long-term growth potential.
Our investment strategy is built on five core pillars that work in concert to safeguard capital, ensure resilience, and deliver consistent, risk-adjusted returns:
- Diversified Lending:
We strategically diversify across sectors, geographies, deal sizes, and exposure types to mitigate concentration risk. By balancing loan quantum and capital structure exposure, we ensure broad portfolio resilience while maintaining a focus on high-quality credit. This disciplined diversification framework shields the portfolio from idiosyncratic risk while enabling the fund to capture attractive opportunities across dynamic market environments. - First Lien Senior Secured Focus:
We prioritize first lien senior secured positions, which offer superior credit protection through priority claims on borrower assets and cash flows. This approach enhances downside protection, reduces loss given default, and improves recovery rates, ensuring capital preservation remains at the forefront of our strategy. - Credit Metrics Adherence:
Our process adheres to strict credit metrics, including leverage multiples, interest coverage ratios, and asset coverage thresholds, ensuring all investments meet rigorous financial standards at deal entry. By maintaining discipline throughout the investment lifecycle, we minimize risk exposure while safeguarding yields on the base assets. - Expected Risk Inoculation:
We employ low-cost leverage to fund credit risk insurance, effectively transferring modeled credit risk and mitigating expected losses without compromising returns. This approach safeguards yields on the base assets, stabilizes portfolio performance, and protects the integrity of underlying investments, creating a cost-efficient mechanism for downside protection. - Data-Centric Investment Process:
Our strategy is underpinned by advanced credit analytics and real-time market intelligence, enabling us to assess, price, and manage risk with precision. By leveraging proprietary research and monitoring systems, we anticipate risks early and make informed, proactive decisions to protect portfolio integrity and deliver predictable outcomes.
Through this integrated approach, Adnate Capital redefines private credit by blending analytical rigor with flexible execution. Our focus on capital preservation, portfolio resilience, and consistent performance positions us to adapt seamlessly to market dynamics while meeting the unique needs of both borrowers and investors. By prioritizing precision in risk assessment and execution, we unlock value in upper middle-market lending, delivering sustainable, downside-protected returns over the investment horizon.
Asset-Based Lending (ABL)
Adnate Capital’s Asset-Based Lending (ABL) strategy targets the middle-market private credit space, providing senior-secured financing solutions backed by high-quality collateral, including receivables, inventory, equipment, and real estate. By focusing on assets with strong, quantifiable value and positioning ourselves at the top of the capital structure, we deliver superior downside protection and capital preservation, even in periods of market stress.
Our approach is differentiated by specialized asset expertise and the ability to underwrite complex transactions that other lenders may overlook. Leveraging our extensive sourcing network and deep relationships across the middle market, we unlock unique opportunities to provide customized financing solutions that meet the needs of borrowers while generating attractive, risk-adjusted returns for investors.
Risk mitigation is embedded into our process. We actively manage risks such as sector cyclicality and borrower concentration through diversified lending, disciplined underwriting, and real-time asset valuation. By continuously monitoring collateral values and cash flow performance, we ensure liquidity and maintain control over asset recovery, enhancing portfolio resilience. Our technology-enabled asset management platforms further allow us to adjust exposures dynamically, ensuring capital efficiency and operational agility.
The ABL strategy combines credit rigor with collateral-backed security, creating a structure that prioritizes principal protection while delivering consistent, long-term performance. By balancing risk and return, Adnate Capital’s ABL strategy provides investors with stable yields, low volatility, and confidence in asset recovery.
Through our disciplined execution, specialized insights, and focus on capital preservation, we are positioned as a preferred financing partner in the middle-market private credit space, delivering reliable solutions that drive sustainable value for both borrowers and investors.
Custom Private Credit Portfolios (SMA)
Adnate Capital offers tailored Separately Managed Accounts (SMAs) that deliver reliable, risk-adjusted returns by investing in private credit markets. Designed for institutional investors such as insurance companies, pension funds, and other entities with specific capital and regulatory requirements, our SMA strategy combines precision, flexibility, and robust risk controls to optimize capital efficiency and income generation.
Each SMA is custom-built to align with institutional objectives, targeting senior-secured private credit opportunities, including asset-backed loans, middle-market direct lending, and structured credit products. By prioritizing first lien positions and investments with quantifiable asset coverage, we emphasize capital preservation and cash flow stability. Portfolios are structured to meet targeted ratings and risk-weighted capital goals, ensuring alignment with investor priorities while complying with regulatory and accounting standards.
Our approach is driven by rigorous credit analytics and dynamic risk management. Leveraging advanced underwriting processes, real-time performance monitoring, and stress testing, we identify high-quality opportunities and actively manage exposures to ensure resilience across market cycles. This focus on transparency and proactive oversight provides institutional investors with the confidence of predictable returns and enhanced portfolio visibility.
With extensive market access and origination capabilities, we unlock opportunities often overlooked by traditional lenders, combining customized solutions with scalable execution. By aligning private credit investments with institutional requirements, Adnate Capital’s SMA platform offers a cost-efficient, transparent, and dependable strategy to generate sustainable, long-term value.
Liquid Credit
Adnate Capital’s liquidity management strategy focuses on maximizing yields while preserving capital through negotiated placements and structured assets, such as CLOs backed by senior-secured, floating-rate loans. By combining bespoke opportunities with high-quality structured credit, we optimize capital deployment and enhance income generation.
Our data-driven approach ensures rigorous asset-level analysis, real-time monitoring, and tactical redeployment of capital to maintain liquidity and minimize volatility. This strategy provides flexibility to capitalize on market opportunities, protect against duration risk, and deliver consistent, risk-adjusted returns, ensuring long-term value creation for investors.
Adnate Journal
Instinct vs. Metrics: The Case for Data-Driven Credit Investing Over Gut Feel
In the complex world of credit markets, there is a persistent truth that may unsettle some of Wall Street’s old guard: deep analysis and disciplined strategy often trump the most seasoned instincts. While many fund managers tout their years in the business as a badge of honor and a mark of market wisdom, it’s worth asking if this experience always holds up when markets shift,
Market Caution: Are Fed Cut Expectations Too Optimistic?
Investors have been quick to recalibrate their expectations following the Federal Reserve’s recent pivot towards monetary easing. The Fed’s shift from aggressive rate hikes to cuts, aimed at softening economic pressures and fostering growth, has buoyed market sentiment. However, this enthusiasm may be premature, as markets appear to be pricing in a steeper trajectory of rate cuts than is prudent given the current economic environment.
Coverage Ratios Begin to Ease
Over the past 18 to 36 months, the Federal Reserve’s shifting policies have significantly impacted interest coverage ratios within the investment-grade credit space. From March 2022 to September 2024, the Fed’s aggressive rate hikes, aimed at curbing inflation, led to increased borrowing costs and higher interest expenses for corporations. As a result, many investment-grade companies experienced a decline in their ability to meet interest obligations.
