Värde and Chesswood Announce Forward Flow Agreement for Equipment Loan and Lease Receivables

NEW YORK and TORONTO – Värde Partners, a leading global alternative investment firm, and Chesswood Group Limited (TSX: CHW), a specialty finance company with 40 years of experience in the commercial equipment finance market, today announced an agreement for the forward purchase of equipment loan and lease receivables originated by Chesswood subsidiaries Pawnee Leasing Corporation and Tandem Finance Inc.

“We are excited to work with Värde Partners as part of expanding Chesswood’s US equipment finance business”, said Ryan Marr, President & CEO of Chesswood. “Värde’s deep expertise in equipment finance and long-term investment approach makes them an ideal funding partner for the Chesswood Group of companies.”

“We are pleased to support the growth of Pawnee Leasing and Tandem Finance given their respected positions and long operating history in small-ticket equipment finance,” said Aneek Mamik, Partner and Global Head of Financial Services from Värde Partners. “This funding of high quality equipment builds on our leading position in providing asset lending solutions to underserved parts of the economy. Hard asset backed financing provides particularly good downside protection in an uncertain economic environment while allowing us to participate in industries where capex spending remains robust.”

About Värde Partners

Värde Partners is a leading global alternative investment firm specializing in credit and credit-related assets. Founded in 1993, the firm has invested through multiple credit cycles, building on its roots in special situations and distressed to invest more than $95 billion across the credit quality and liquidity spectrum in both public and private markets. Värde currently manages over $13 billion in assets with teams in North America, Europe, and Asia Pacific focused on Corporate & Traded Credit, Real Estate, and Financial Services. For more information, please visit www.varde.com.

About Chesswood Group Limited

Chesswood Group Limited is a holding company whose subsidiaries engage in the business of specialty finance (including equipment finance throughout North America, and vehicle finance in Canada), as well as the origination and management of private credit alternatives for North American investors. Based in Toronto, Canada, the firm is publicly traded on the Toronto Stock Exchange (TSX: CHW).

Värde Partners and Hawkins Way Capital Make Fourth Acquisition Bringing Total Capitalization of JV to Over $1 Billion in Its First Year

NEW YORK – Värde Partners, a leading global alternative investment firm, and Hawkins Way Capital, a vertically integrated real estate company, announced today the recent purchase of 525 Lexington Avenue, a 655 room non-operating hotel in the Midtown East neighborhood of Manhattan. This brings the total capitalization of the JV formed by Värde Partners and Hawkins Way Capital to over $1 billion within its first year with a portfolio of eight value-add and distressed hospitality and housing assets in major U.S. cities.

“We are excited about the level of activity we’ve engaged in through our JV with Värde Partners. We continue to leverage our hospitality, multifamily and student housing owner-operator expertise to refresh and/or reposition assets in order to maximize value,” said Ross Walker Co-Founder and Managing Partner of Hawkins Way Capital.

“Our strategy for the joint venture has not changed: we aim to build a high quality, inflation protected, and cash flow generative portfolio,” said Tim Mooney, Partner at Värde Partners. “Coming out of the pandemic, we continue to find distressed hospitality and select housing assets in prime locations in major gateway cities where we can drive this opportunity.”

The 525 Lexington property is a 35-story, 406,000 square foot building currently configured as a 655 key hotel with over 16,000 square feet of meeting space, including two double height ballrooms, a large outdoor terrace on the 16th floor, a penthouse fitness center, and a large restaurant/lounge space on the ground floor. Originally called the Shelton, 525 Lexington was the world’s tallest hotel at its completion in 1923 and is designated as a landmark building in New York City. It was converted to a Marriott branded hotel in 1990 and operated as such until its closure at the beginning of the Covid-19 pandemic.

The joint venture’s portfolio also comprises the DoubleTree by Hilton Metropolitan in the heart of Midtown Manhattan, the Sheraton Boston in the Back Bay neighborhood of Boston, and five other residential developments in New York, California, and Rhode Island.

About Värde Partners

About Hawkins Way Capital

Hawkins Way Capital, co-founded by Managing Partners Ross Walker and Karan Suri, is a vertically integrated real estate company with $2.5 billion of assets under management on behalf of institutions and individuals focused on value-add and opportunistic investments across various asset classes and geographies. The company seeks niche theses targeting attractive risk-adjusted returns. Its disciplined approach leverages the principals’ investing experience and extensive network to execute strategies that offer long-term value. Hawkins Way has offices in Los Angeles and New York. For more information, please visit www.hawkinsway.com.

Värde Views: Opportunities in 2023

Värde Partners CIOs Ilfryn Carstairs, Brad Bauer and Giuseppe Naglieri, reflect on credit markets, areas of opportunity and how they see the current cycle shaping up as we start off 2023 in a position of further uncertainty around inflation, rates and the cost of capital around the world.

Download Värde Views here.

Värde Partners Promotes General Counsel Andrew Malone to Partner

MINNEAPOLIS – Värde Partners, a leading global alternative investment firm, today announced that the firm’s General Counsel, Andrew Malone, has been promoted to Partner.

“We are delighted to elevate Andrew to Partner recognizing his leadership of the world-class global legal, tax and related functions he has helped build since joining the firm nearly a decade ago. Andrew is a great leader and manager, demonstrates the highest level of integrity and dedication, and brings a strategic mindset that has been instrumental in bringing solutions that add value to the firm and our LPs in the everchanging investing and asset management landscape,” said Ilfryn Carstairs, CEO and Co-CIO of Värde Partners.

Based in Minneapolis, Andrew oversees the Legal, Compliance, Audit and Tax functions globally. He has provided key leadership in a number of roles throughout his tenure at the firm and previously served as Chief Counsel – Tax and Global Funds.

Prior to joining Värde in 2014, Andrew was managing counsel at the State of Wisconsin Investment Board. Prior to that, Andrew was a member of the legal team at Black River Asset Management. He began his career as an associate in the tax group at the law firm Godfrey & Kahn.

Andrew received his B.A. from Valparaiso University and his J.D. from the University of Michigan Law School.

About Värde Partners

Flynn Properties and Värde Partners Acquire 80% Interest in 89 Select Service and Extended Stay Hotels

SAN FRANCISCO & MINNEAPOLIS – Flynn Properties Inc., owner of commercial real estate, luxury resorts and select service hotel properties in America and abroad, in a joint venture with Värde Partners, a leading global alternative investment firm, today announced that it has acquired an 80% joint venture interest in 89 select service and extended stay hotels in a $1.1 billion implied total enterprise value transaction from affiliates of Highgate and Cerberus Capital Management, L.P. (“Cerberus”).

With properties located throughout the United States, the portfolio comprises 58 Marriott-branded hotels, 24 Hilton-branded hotels, 4 Radisson-branded hotels, 2 IHG-branded hotels and 1 Choice-branded hotel, which will undergo capital improvements over time. Affiliates of Highgate and Cerberus will retain a 20% interest in the investment, and Highgate will continue to manage the properties on behalf of the joint venture. This is the second joint venture between Flynn Properties and Värde Partners; last year the partners acquired a portfolio of 20 Marriott- and Hilton-branded select service hotels from Apple Hospitality.

“We are excited to announce the addition of these hotels to our portfolio,” said Greg Flynn, Founder, Chairman and Chief Executive Officer of Flynn Properties. “This acquisition is part of a broader business strategy of Flynn Properties to increase its limited service hotel footprint, which has proved to be one of the best performing sectors in the industry. We are also excited by the caliber of properties included in this deal, as the portfolio’s brands are global hospitality icons known for hosting some of the world’s most loyal travelers for business and leisure while offering exceedingly robust guest loyalty programs, which we believe will be a key source of guest revenue and retention. Flynn Properties and Värde Partners are thrilled to execute this transaction with Highgate and Cerberus, and to work going forward with the many important franchisors and associates across the portfolio.”

This acquisition will bring Flynn Properties’ limited service hotel portfolio to 115 properties. Flynn Properties is a division of San Francisco-based Flynn Holdings, which has two principal businesses: real estate and restaurants. Flynn Properties’ prior hotel investments include numerous limited service and extended stay hotels as well as five super-luxury resorts: Esperanza and the Chileno Bay Resort, both located in Los Cabos, Mexico, the Carneros Resort & Spa and Solage, both located in the Napa Valley, and the Hotel Madeline in Telluride, Colorado. Its commercial investments consist primarily of tech-oriented office buildings on the West Coast which have totaled over 3 million square feet. Its affiliate, Flynn Restaurant Group LP, is the largest franchise restaurant operator in the world and one of the 20 largest foodservice companies of any kind in the United States, owning and operating 2,400 restaurants in 44 states generating $4 billion in sales and employing approximately 73,000 people.

“The hotel sector continues to strengthen amidst a complex macro backdrop, demonstrating its ability to offer investors the potential for growing, inflation-protected cashflows. These properties recovered quickly from the pandemic and have been performing well, indicative of the quality of their brands and the continued demand for limited service and extended stay hotels,” said Tim Mooney, Global Head of Real Estate at Värde Partners. “As this cycle continues to evolve, we believe there will be further opportunities to invest selectively in high-quality assets that are well positioned to capitalize on the robust demand for business and leisure travel. We are pleased to partner for the second time with Flynn Properties to acquire this interest in another portfolio of properties in attractive locations with compelling market supply/demand dynamics.”

Deutsche Bank Securities Inc. served as financial advisor to Flynn Properties and Värde Partners on this transaction.

About Flynn Properties Inc.

Flynn Properties Inc. has substantial experience in commercial and hospitality real estate investment. Founded in 1994 and based in San Francisco, CA, Flynn Properties has owned in excess of 3 million square feet of tech-oriented office buildings on the West Coast. In addition to 115 premium-branded select service and extended stay hotels, Flynn Properties’ hospitality investments also include the luxury resorts Esperanza and the Chileno Bay Resort, both located in Los Cabos, Mexico, the Carneros Resort and Solage, both located in the Napa Valley, and the Hotel Madeline in Telluride. Its affiliate, Flynn Restaurant Group LP, is the largest franchise restaurant operator in the world and one of the 20 largest foodservice companies of any kind in the United States, owning and operating 2,400 restaurants in 44 states generating $4 billion in sales and employing approximately 73,000 people. For more information, visit www.flynnholdings.com.

About Värde Partners

Värde Partners is a leading global alternative investment firm specializing in credit and credit-related assets. Founded in 1993, the firm has invested through multiple credit cycles, building on its roots in special situations and distressed to invest more than $90 billion across the credit quality and liquidity spectrum in both public and private markets. Värde currently manages over $13 billion in assets with teams in North America, Europe, and Asia Pacific focused on Corporate & Traded Credit, Real Estate, and Financial Services. For more information, visit www.varde.com.

Swedish SME lender DBT Secures SEK 3,1 Billion in Funding

STOCKHOLM — DBT (www.dbt.se), the Stockholm-based leading European SME lender, has closed a SEK 3,1 billion debt facility to accelerate its lending to Swedish SMEs from NatWest and Värde Partners. The funding enables DBT to scale further and support more SMEs across all industries with simple access to growth funding.

Swedish-based SME lender DBT has entered into a funding agreement with leading UK bank NatWest and the American global investment firm Värde Partners to lend up to SEK 3,1 billion to Swedish SMEs. The funding agreement will enable DBT to continue meeting the strong demand for growth and innovation oriented corporate loans, demand which has increased in light of the current European energy crisis, fuel price increase and inflation surge, all of which have impacted SMEs.

This is a milestone financing arrangement which enables us to support even more scaling SMEs across Sweden. It comes at the best possible time, as the SME companies we support see increased need for flexible yet long term strong financing in light of the current energy crisis, inflation surge and rising fuel prices, said Alexis Kopylov, CEO and co-founder of DBT.

Since its inception in 2017, DBT has built a unique position within growth financing to SMEs leveraging its credit intelligence technology platform, which by leveraging real-time client data enables tailored and scalable funding with faster turnaround to borrowers. DBT’s proprietary technology platform for risk assessment and lending has allowed the company to lend more than SEK 2 billion in the past six years. Data shows that DBT’s borrowers have outperformed other SMEs by 7x in terms of growth¹.

NatWest, the UK’s biggest bank for business, has an established presence in Europe via different entities and a long standing local presence in Sweden, and have been supporting specialty lenders across SMEs, consumers and other sectors for a number of years.

Stable access to credit is crucial to the success and growth of SMEs and their positive impact on the economy. Our backing of DBT represents a further step towards our commitment to remove barriers to enterprises and allow them to grow. DBT shares our commitment to serve the growing SME market and we are pleased to further support DBT’s ambition and work with them, says Olmo Montesanti, Co-Head of Private Financing Sales Europe at NatWest Markets N.V., one of NatWest’s entities in Europe.

Värde Partners has more than 20 years of experience investing across the capital structure in consumer finance, commercial finance and other areas related to financial services. The firm currently manages $2 billion of financial services debt and equity investments across a variety of underlying asset classes including secured and unsecured consumer loans, motor vehicle financing, commercial equipment finance, residential housing finance and consumer and commercial credit cards.

We welcome the opportunity to establish this partnership to help fund DBT’s aspirations and further expand our provision of commercial finance capital in Europe. DBT have invested considerably in their platform and have developed differentiated SME loan underwriting capabilities. Fintech lenders like DBT are going through a period of extraordinary growth due to a secular shift in their favor. Borrowers, both commercial and consumer, are increasingly demanding more tailored forms of capital to fund their growth and purchases. We believe this has created a substantial asset-based lending opportunity for us that is set to grow materially over the next five years, said Aneek Mamik, Partner and Global Head of Financial Services at Värde Partners.
NatWest has been a great partner to work with and we’re grateful for their continued strong support as lender. With this new transaction we also welcome Värde Partners as a new collaboration partner. Both are well renowned financial institutions sharing our commitment to close the SME funding gap, added Alexis Kopylov.

¹Annual revenue growth 2017-2020 for Swedish AB’s with 5-100 employees

DBT in brief
DBT was founded in 2017 with the ambition of creating better growth opportunities for Sweden’s small and medium-sized companies. Leveraging its credit intelligence platform DBT combines a rational tech and data-driven process with a personal and qualitative collaboration to offer SMEs simple access to growth funding. DBT’s corporate financing is aimed at limited companies across all industries that need to borrow SEK 3-30 million. DBT is a registered financial institution with the Swedish Financial Supervisory Authority. For more information, please visit www.dbt.se

NatWest Markets in brief
NatWest Markets helps corporate and institutional customers manage their financial risks and achieve their short- and long-term financial goals while navigating changing markets and regulation. NatWest Markets N.V. is registered in Amsterdam and provides its European customers with access to EU capital markets. NatWest Markets N.V.’s branches are located in the UK (London), Germany (Frankfurt), France (Paris), Sweden (Stockholm), Italy (Milan), and Ireland (Dublin).

Värde Partners in brief
Värde Partners is a leading global alternative investment firm specializing in credit and credit-related assets. Founded in 1993, the firm has invested through multiple credit cycles, building on its roots in special situations and distressed to invest more than $90 billion across the credit quality and liquidity spectrum in both public and private markets. Värde currently manages over $13 billion in assets with teams in North America, Europe, and Asia Pacific focused on Corporate & Traded Credit, Real Estate, and Financial Services.