The problem

Raising capital and underwriting loans are two different skills. Many funds raise capital well but have no credit officer underwriting the loans before they fund or monitoring them afterward. Every loan performs until one defaults, and then there is no one trained to handle the workout.

How the engagement works

The investor or fund keeps full ownership and control of the entity that holds the loans. Castle Rock manages the credit side under a management agreement, scaled to the size and condition of the portfolio. If the owner is not satisfied with how we are managing, they end the engagement. We do not take custody of capital and we do not own the loans. We manage them.

What we bring

We run the credit side of the portfolio at the level of a senior credit officer, across both the performing loans and the ones that go nonperforming. This is experienced credit applied to your portfolio, the kind that is hard to find and expensive to build internally, which is why owners bring us in rather than try to assemble it themselves.

Three downturns, not one

The experience behind Castle Rock is three real downturns. We managed distressed loans in the aftermath of the savings and loan crisis, again through the credit turmoil of the late 1990s, and through the 2007 collapse, which we saw coming and built the firm to meet. Each time, the lenders who came through it were the ones who had experienced credit in place before the downturn. We are seeing the same weak underwriting in private lending now, and the time to bring in that experience is before the losses start.

Who it is for

This service is built for funds, note buyers, and lenders with capital deployed and a portfolio large enough to need one consistent credit standard. For single-loan reviews and white label credit support built for smaller private lenders and note investors, see The Mad Lender.

Contact

To talk through your portfolio, email Doug Smith at dsmith@castlerockcc.com.