Innovative financing solution meets burgeoning demand for specialty lending in the bitcoin and real asset markets; Investment structure pairs traditional assets with bitcoin, producing uncorrelated downside protection while generating interest income and bitcoin appreciation sharing to combat inflation
PHILADELPHIA, PA / ACCESSWIRE / November 25, 2024 / Newmarket Capital, the $3 billion investment manager known for its innovative approach to structured credit, solutions, and impact investing, today announced the launch of its affiliate business, Battery Finance, a pioneering asset management and specialty finance platform built on bitcoin. With Battery's launch, Newmarket has also completed its first investment combining bitcoin and real assets, a term financing of Bank Street Court, a seasoned mixed-use asset located within steps of the First Bank of the United States. Building on Newmarket's track record in innovation and structured solutions, Battery opens a new chapter in financial markets with its unique approach to asset finance.
Battery's specialty lending strategy combines traditionally financeable assets such as real estate and project finance together with bitcoin, fusing the assets into a unified collateral package. Battery's structure enables borrowers to tap into the long-term financing potential of bitcoin while offering the lender uncorrelated downside protection through added collateral. In addition to interest income, Battery also generates structured participation in bitcoin appreciation over the life of the loan. Battery's unique approach to private credit is designed to reshape risk-adjusted returns while defending against inflation.
"At Newmarket, our tradition is innovation. We are in pursuit of structured finance strategies that offer big picture solutions. Battery is a great leap forward," said Andrew Hohns, PhD, founder and CEO of Newmarket Capital. "Our lending approach can serve to counterbalance inflation and monetary debasement. By strategically combining measured amounts of bitcoin with real assets, Battery unlocks new combinations of value for borrower and lender alike."
Battery Completes Innovative Financing using Revolutionary Structure
In connection with the launch of Battery, Newmarket also announced today the completion of its first transaction employing Battery's revolutionary dual-collateralized approach. This innovative structure refinances a seasoned mixed-use property in Philadelphia's historic Old City neighborhood while integrating bitcoin into the collateral package. The asset consists of three architecturally significant 19th century buildings connected by an interior courtyard, comprising 63 loft-style residential units and three commercial spaces. Battery's dual-collateralized loan structure enables the asset owner to refinance its existing debt, to reinvest in the structure through building improvements, and to add bitcoin to the financing package. The borrower obtains attractive long-term financing and bitcoin dynamism while the lender benefits from current income, additional downside protection, and participation in long-term bitcoin upside.
"There is rapidly growing demand for specialty finance solutions that integrate bitcoin," said Thierry Adant, Chief Investment Officer at Newmarket Capital. "Traditional asset owners can transform the equity in assets they hold through the integration of bitcoin and bitcoin owners can obtain stable, long-term financing supported by their bitcoin but without volatility-driven liquidation risk. By alloying bitcoin with traditionally financeable assets, Battery is designed to unlock value. The Battery approach is a new paradigm in credit, combining the stability and cash flow of traditional assets like real estate and project finance with bitcoin's potential for appreciation over the long run."
"We thank the owners of Bank Street Court for being our partner in this revolutionary structure: Bank Street is mere steps from the First Bank of the United States in Philadelphia and a short walk from Independence Hall. We are proud to add this revolutionary new financing structure to the long list of Philadelphia firsts that have inspired the world."
Closing the Asset Liability Gap
Newmarket is also focused on new approaches to close the asset liability gap confronting pension funds across the United States. Facing massive funding shortfalls and shifting demographics, plans have embraced riskier investments while taxpayers are set to shoulder the costs of mounting pension contributions. "We believe that alternative paths exist, and financial innovation through the tactical use of bitcoin can help to reshape return profiles while improving the risk profile of credit and alternatives."
Added Dr. Hohns: "Addressing the inflation question is the most pressing challenge confronting allocators today-and getting it right is existential for pension beneficiaries across every state and every industry. We believe that the strategic integration of bitcoin can fortify pensions against the perils of inflation while reducing risk and improving funding ratios."
About Newmarket Capital
Newmarket is an asset manager and registered investment adviser positioned at the nexus of structured solutions, impact, and innovation. In partnership with Ten31, the largest bitcoin-only venture capital fund, Newmarket founded Battery Finance to develop and manage institutional asset management strategies built on bitcoin. Newmarket has been an active investor in structured credit and securitization since 2013, specializing in portfolios of infrastructure, large corporates, and commercial real estate loans. These investments have provided risk-transfer tools that help optimize bank balance sheets. Newmarket specializes in impact investments, and has catalyzed billions of dollars of fresh lending to urgently needed climate resiliency and development finance projects around the world.
Our company's namesake, Newmarket, celebrates our focus on improvement and innovation while honoring one of the oldest surviving market buildings in the United States, New Market, which is located in Philadelphia, where the company is headquartered. To learn more, please contact info@newmarketcapital.com or visit us at newmarketcapital.com.
