How to find the best deals: the inside scoop on Keyview’s origination process

At Keyview, the quality and opportunity of the deals we pick is the first step in our process aiming to achieve consistent outsized returns and income for investors while helping companies succeed in their markets.

But how do we find these deals and how do we decide which ones to do?

Finding the one

In the competitive landscape of private credit markets, getting deal origination right is a prerequisite of success. And it is founded on deep and trusted relationships within our adviser/capital partner network. With decades of collective experience, our investment and origination team navigates the intricacies of building relationships, structuring transactions and managing expectations to deliver bespoke capital solutions.

In its most basic terms, how we source some of the best opportunities in the market can be summarised by:

1. Looking in the right places
2. Maintaining strong relationships through great partnership
3. Attracting enquiries through an impeccable reputation for fairness and support

Simple to state, but a lot of work and expertise to pull off. Here’s how these are achieved in practice.

1. Picking the right pool: Firstly, we look for deals among tested, quality counterparties. A key differentiator for Keyview lies in our exclusive selection of origination partners and direct borrowers: we prioritise a limited group with whom we have cultivated strong, trust-based relationships. By collaborating exclusively with partners who align with our investment philosophy, we are positioned to navigate the private credit landscape with efficiency and precision.

2. Building long-term partnerships: Our emphasis on building relationships with origination partners extends beyond transactional dealings. We view these partnerships as long-term collaborations, fostering mutual trust and understanding. This is embedded in our commitment to transparent communication and managing expectations effectively.

3. Inbound interest: Consequently, we are invited into possible deals either by direct borrowers, typically companies we have lent to previously, or by corporate advisers who specialise in raising capital for companies. Borrowers or their advisers are usually looking for direct lending, growth capital, transitional capital, real estate financing (land, construction, investment) or special situations funding.

Our origination process serves as the foundational step in maintaining a focus on quality.

Locking it down

Once we have identified a potential transaction, we make decisions quickly by following our rigorous process:

1. Analyse the investment and conduct due diligence according to our proven screening process.
2. Consider the transaction’s merits, starting with capital preservation scenarios.
3. Set a price that factors in our investment returns objectives and the unique attributes of that transaction and the borrower.

4. Investigating everything: On every potential deal we conduct thorough investment analysis, with risk management and capital preservation at its core. This stringent focus on risk management means that we turn away more than nine in ten enquiries. But we always provide expedient and constructive feedback to prospective borrowers and corporate advisers, who may be partners in future.

We employ a blend of qualitative and quantitative due diligence, often taking the approach of a company/asset owner rather than simply a provider of credit. Our primary objective is capital preservation, irrespective of how simple or complex a transaction may be. If we believe there is a foreseeable chance of losing money, we won’t proceed with that transaction.

5. Searching for suitability: We are looking not just for a safe, solid investment, but also one that suits our funds’ return targets. What we tend to find as our “sweet spot” are transactions that typically have one or more of the following characteristics:

1. Mid-market ticket sizes, ranging from $10 million to $100 million. Typically these transactions are with established companies / asset owners with a proven track record.
2. Complex situations that can quickly be perceived as higher risk when in fact risk can be managed but requires more time, effort and innovative structuring to resolve. These types of transactions usually don’t suit traditional credit funds or banks, who have minimum/standard requirements that must be met to proceed with a transaction.
3. Companies prioritising speed of execution, without compromising certainty of funding/completion.
4. Pricing right: The final step is pricing for the risk. Our approach is based on aiming to optimise the rate of return for the relative level of risk. While we actively consider benchmarks, comparable transaction pricing and other market data, ultimately we look to the ensure that the risk-adjusted return reflects a level where we are happy to invest our own personal capital.

Keyview’s origination process is built on trust, expertise and a relentless pursuit of quality. Through strategic selection of origination partners, long-term relationship building, and maintaining an impeccable reputation, we consistently source opportunities that align with our investment philosophy. Our rigorous origination process doesn't end with finding a potential deal; rather, it extends to a comprehensive analysis, careful consideration of merits, and precise pricing to optimize risk-adjusted returns. The success of our investments hinges on the diligence and precision embedded in our origination process, forming the cornerstone of our commitment to excellence in the private credit landscape.