The funds have been specifically set aside to assist those impacted by COVID-19
Earlier this week, Slate Asset Management announced it would be making available to the Canadian mortgage market $500 million in transitional funding for borrowers, businesses, lenders and projects negatively impacted by COVID-19.
Despite the laudable stimulus gymnastics currently being performed by the Canadian government, Blair Welch, founding partner at Slate, says more capital will be needed for the economy’s wheels to keep spinning.
“[Capital’s] starting to dry up or change,” he says. “I think people, certain companies and certain businesses are running into some liquidity problems. What we see is there will be an opportunity to put capital out because yes, we believe that capital will be harder to come by than it was pre-COVID-19.”
The funds will be used for a multitude of purposes: to provide bridge and traditional lending for borrowers for acquisitions and refinances; to assist lenders in refinancing both performing and non-performing loans; and to create flexible liquidity solutions, such as preferred equity.
Welch says Slate’s knowledge of the Canadian market and the fact that the $500 million is already on hand mean they’re ready to start providing assistance immediately.
“Slate currently has capital, our own and that of our global institutional partners, to deploy right now,” he says.
Assisting in bringing these funds to market will be Doug Podd, the managing director of Slate’s Canadian office. Podd, who many in the mortgage space will know from his years at Brookfield Financial, says the funds will be made available across multiple channels.
“Tapping into the mortgage brokerage market would be priority one. Some direct lending as well, obviously,” Podd says. Lenders who may be looking to sell a portion of their portfolios or pair up with a capital partner to complete at-risk transactions will also get a bite at the apple.
“What we bring to the table is the flexible capital,” adds Welch. “We can be pretty creative on how we structure that capital.”
Being in need of hundreds of millions of dollars of private capital is not an ideal position for the Canadian lending space to be in, but the fact that Slate is willing to pump those funds into the country at a time of unfathomable disruption should be taken for what it is: a sign of extreme confidence in the economy’s ability to rebound.
“All the things that a global investor looks for,” such as an educated workforce, a stable government, and a wealth of natural resources, “I think Canada has,” says Welch. “We think, long-term, it’s a no-brainer.”
