First Eagle Investments -Wed, 10/15/2025 - 17:32

Asset-Based Lending: Collateralizing Corporate Assets

Key Takeaways

Asset-based lending (ABL) is a form of corporate lending that leverages collateral and may allow borrowers to maintain optimal capital structures and sufficient liquidity.
For investors, ABL may present a differentiated source of returns within the private credit world, one with the opportunity for potentially higher yields and appealing downside mitigation accompanied by strong structural protections and explicit collateral backing.
As underwriters of ABL facilities, Napier Park seeks to maximize borrowers’ access to capital while minimizing our—and our investors’—risk of loss. Conservative valuation of loan collateral is a key element of our risk-management process.
ABL is a relatively niche sector within private credit compared to the cash-flow loan market. We believe the time-tested perspectives, strategies and relationships developed by Larry Klaff and Lisa Galeota through their 60-plus years of combined experience with ABL distinguish our expertise as lenders in this asset class.

Asset-based lending (ABL) facilities—corporate loans supported by the borrower’s assets as collateral—have long represented a differentiated, if somewhat niche, source of return for investors.

With a cloudy macroeconomic trajectory and persistently above-target inflation further exacerbated by tariffs, investors have shown increased interest in this subset of the private credit market as a potential diversifying complement to other public and private credit exposures. For borrowers anticipating potential disruptions in credit availability, ABL offers the opportunity to unlock additional liquidity by leveraging unencumbered assets on their balance sheet, including inventory, accounts receivable, real estate, machinery and equipment, and intellectual property.

Leveraging over 60 years of combined industry experience and nearly 20 years working together, Larry Klaff, head of asset-based lending, and Lisa Galeota, head of asset-based lending portfolio management and underwriting, below discuss asset-based lending and how nonbank lenders may generate attractive long-term risk–adjusted returns for investors through this differentiated asset class.

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Contacts

First Eagle Investments

First Eagle Investments is an independent, privately owned investment management firm headquartered in New York with approximately $176 billion in assets under management as of September 30, 2025.* Dedicated to providing prudent stewardship of client assets, the firm focuses on active, fundamental, and benchmark-agnostic investing, with a strong emphasis on downside mitigation. With over 15 years of experience managing assets on behalf of insurers, First Eagle is focused on meeting their unique portfolio and servicing needs through bespoke investment solutions and a dedicated insurance coverage team. The firm’s investment capabilities for the insurance market include alternative credit, fixed income, and global equities.

All figures related to assets under management (AUM) are preliminary figures based on management’s estimates and as such are subject to change.

* The total AUM represents the combined AUM of (i) First Eagle Investment Management, LLC, its subsidiary investment advisers, First Eagle Separate Account Management, LLC, First Eagle Alternative Credit (“FEAC”), (ii) Napier Park Global Capital (“Napier Park”), another subsidiary investment adviser and (iii) Regatta Loan Management LLC, an advisory affiliate of Napier Park as of 30-Sep-2025. It includes $3.3 billion of committed and other non-fee-paying capital from Napier Park Global Capital, inclusive of assets managed by Regatta Loan Management LLC and $1.1 billion of committed and other non-fee-paying capital from First Eagle Alternative Credit, LLC. Effective 5-Sep-2025, the investment activities of Napier Park Global Capital and First Eagle Alternative Credit (FEAC) have been aligned under Napier Park’s management and brand. First Eagle Alternative Credit, LLC is a distinct registered investment advisor within the Napier Park platform, acting in sub-advisory capacity to a number of First Eagle’s registered funds.

Katie Cowan
Head of Insurance Client Solutions
katie.cowan@firsteagle.com(310) 893-2440

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