The InstrumentA true-sale securitization of contractual payment streams from private equity portfolio companies, issued as investment-grade bonds to institutional credit investors. Not fund-level leverage. Not a NAV facility.
Distributions have stalled. Sponsors are accepting 5–20% discounts through secondaries to generate liquidity. NAV loans, continuation funds, and strip sales each carry structural compromises and none delivers programmatic, repeatable, non-dilutive cash return at par.
This structure provides the same liquidity — without selling assets below intrinsic value, without fund-level leverage, and without forfeiting LP upside.
Each tool in the current sponsor toolkit solves a narrow problem and creates new ones. None converts unrealized portfolio value into distributable cash on a programmatic basis.
Sponsors need a mechanism that returns capital at par, leaves equity and governance with the GP, and can be repeated across funds — at scale.
Whole Business Securitization turns predictable contractual payment streams — franchise royalties, system fees, license payments — into investment-grade bonds. Twenty-five years of issuance. Negligible senior-note losses.
The same logic applies to private equity. Each portfolio company commits a fixed annual payment, sized to a fraction of its net distributable cash flow. Those rights are sold via true sale into a bankruptcy-remote issuer, which issues A–BBB rated notes to institutional credit investors.
Proceeds return to the fund as immediate, distributable liquidity. Equity ownership stays with the sponsor. Governance stays with the sponsor. Long-term upside stays with the sponsor — and ultimately with LPs.
What's different from WBS isn't the structure. It's the obligors: instead of thousands of small franchisees, a diversified pool of 10–20 PE-owned mid-market companies across sectors.
Negligible senior-note losses across twenty-five years. The structural principles — true sale, bankruptcy-remote SPV, excess spread, amortization triggers, diversification of obligors — are validated, rated, and well-understood by credit committees.
For two decades the structure was theoretically possible but practically blocked — by rating methodologies, fund documents, and the absence of an arranger willing to build the category. All three constraints have lifted within the last 36 months.
Between 2021 and 2023, S&P, KBRA, and Fitch published criteria for rating multi-obligor operating-risk pools — the precise framework this asset class requires. The methodology gap is closed.
Limited partnership agreements written in the past decade contain materially more flexible provisions around securitization, asset transfers, and structural financing than vintages from the early 2000s.
GPs are accepting 5–20% discounts through secondaries and continuation vehicles to manufacture liquidity. This structure delivers the same cash to LPs without selling assets below intrinsic value — and without the optics, dilution, or governance loss that accompany a discounted sale.
The differences are not rhetorical. They are functions of how the instrument is constructed — at the SPV, in the rating, and in the legal documents.
The structure is unusual in that it does not require a winner. Sponsors, LPs, and credit investors each receive what they came for — without any party absorbing the cost the others avoid.
Diversification across 10–20 mid-market companies, combined with WBS-tested structural features, produces a credit profile materially stronger than the tools currently in use.
Each portfolio company enters a Contractual Payment Agreement: 20–30% of NDCF as a fixed annual payment, senior to equity, subordinate to OpCo debt.
Payment rights are sold to an Aggregator HoldCo via true sale, then to a bankruptcy-remote Issuer SPV.
The SPV issues A–BBB rated senior notes (and optional mezzanine) to institutional credit investors, supported by 10–15% first-loss capital.
Proceeds flow to the fund and become immediately distributable to LPs. On any OpCo exit, the CPA terminates with a structured payment that protects DSCR.
Performance depends on diversification across uncorrelated obligors, disciplined sizing of payment obligations relative to NDCF, and structural protections — true sale, non-consolidation, termination payments — consistent with the WBS precedent. The instrument is engineered to those constraints, not around them.
The U.S. private equity universe contains roughly 7,000 portfolio companies generating $8M–$50M of net distributable cash flow. A single $1B issuance requires only 10 to 20 of them.
With a functioning platform, annual issuance potential is comparable to the early growth curve of WBS itself — measured in tens of billions per year, scaling toward a hundred billion or more.
Rating-agency reasoning, true-sale and non-consolidation analysis, OpCo sale mechanics, comparative DSCR modeling, and market scalability — adapted from the $65B+ Whole Business Securitization precedent.
Introductory conversations are without obligation and held in discretion. We work quietly alongside sponsors, advisors, and existing financing relationships.