Strategy

How Asset-Backed Financing (aka Securitization) Works

The simplest way to understand an asset-backed facility is that it’s like a credit card that you can buy one thing with.

A unique activity that does not contribute to the firm’s value and cost drivers makes no strategic contribution.

Execution must always be tied to the firm’s value and cost drivers.

The opportunity lost by increasing the amount of blank space is gained back with enhanced attention on what remains. More white space means that less information is presented. In turn, proportionately more attention shall be paid to that which is made less available. When there is less, we appreciate everything much more.

During the Amortization Period, the music stops. No more new assets. All cash flows from existing assets go straight to paying down investor principal. This is usually triggered by time or performance metrics falling below certain thresholds. Putting a deal into an amortization phase more quickly is a risk mitigation feature that can help limit

Core competence implies both a technology platform shared by existing businesses and the ability to leverage the platform to develop new businesses.

1. Capital Velocity : Your equity dollar "turns" faster - instead of being locked in one robot, it can support the deployment of multiple robots over time.




2. Leverage Effect : Each equity dollar leverages debt capital (the AB facility) to deploy more total assets than equity alone could support.




3. Continuous Deployment : Capital recycling enables

Activities are consistent when they are jointly in tune with the firm’s strategy, even if they don’t reinforce each other directly. A high level of consistency or fit implies that the firm’s policies and practices are aligned together with its market position.