About Cesar Bello:
Cesar Bello is Partner, Research and Portfolio Management lead of the Litigation Finance ("LitFin") effort at Corbin Capital Partners. Cesar also works more broadly on the firm’s private investment program. Prior to joining Corbin, Cesar worked at Skadden, Arps, Slate, Meagher & Flom LLP and Ivy Asset Management. Cesar is the Portfolio Manager of the LitFin strategy at Corbin Capital, which has been active in commercial litigation finance since 2018, deploying approximately $400mm with a differentiated approach focused primarily on shorter duration, credit-like opportunities with downside protection.

About Corbin Capital Partners:
Corbin Capital Partners is a woman-led independent alternative asset management firm that specializes in multi-strategy hedge fund and opportunistic credit investing. Corbin has experience creating and managing differentiated commingled and bespoke portfolios for investors globally. As a firm that strives to create high-quality solutions for clients, Corbin deploys a broad toolkit of investing techniques, including external fund investments, opportunistic co-investing and direct trading capabilities. The firm is focused on maintaining its client centric model and continuing to serve as a trusted partner to clients. As a woman-led firm, Corbin Capital is committed to diversity, equity, and inclusion throughout the organization, inspired by its diverse leadership team. As of April 1, 2024, Corbin had $9.10 billion in assets under management.

About Litigation Finance:
Litigation finance is the provision of third-party capital to help finance law firms or plaintiffs pursuing legal claims in exchange for a portion of proceeds received. This is an emerging asset class in the U.S. that is generally underbanked and misunderstood, in part because the "collateral" is often difficult to value. Cesar and the Corbin Capital team recently published a great white paper on LitFin that I recommend checking out.

About the Episode:
In this episode Cesar explains the background of the LitFin industry, what it is, how the asset class works, and the various ways to access it. We spend the majority of the conversation talking about the different investment approaches, and Corbin Capital's focus on shorter duration credit-like cases with emphasis on downside protection as well as multiple off-ramps and levers to express risk and unlock value, with examples from real cases. We discussed risk factors, challenges, and how LitFin firms are differentiated in their approach to portfolio construction and case origination plus much more.

Additional Resources:
Cesar was interviewed for a story by Bloomberg Law on LitFin and you can read that article here.

Derek is a former client and runs a successful investment management organization based in Tampa, Florida. He is a husband, father, founder, and investor that specializes in small and mid-cap financials. He and I caught up and talked about banks, private credit, financial industry stocks, his research and investment process, and much more in this episode. He has grown his firm largely through word-of-mouth and his excellent investment letters and research notes. I hope you enjoy the conversation.

In 2008, Derek Pilecki founded Gator Capital Management. He currently manages a long/short financials strategy, long-only financials strategy, and various other individual portfolios. Derek has managed a private fund for 11 years. He launched one mutual fund and took over management of another mutual fund.

From 2002 through 2008, Derek was a member of the Goldman Sachs Asset Management (GSAM) Growth Equity Team (Co-Chair of the Investment Committee for the Growth Team and a Portfolio Manager).

Prior to GSAM, Derek was an Analyst at Clover Capital Management in Rochester, NY and Burridge Growth Partners in Chicago, IL. He covered the Financials sector at both firms. Before entering graduate school, Derek worked at Fannie Mae providing interest rate risk analysis for the company’s mortgage investment portfolio.

Derek holds an MBA with honors in Finance and Accounting from the University of Chicago and a BA in Economics from Duke University. He is also a CFA® charterholder.

Vadim Verkhoglyad is the Vice President, Head of Research Publication at dv01.

• His LinkedIn is here.
• He has over 16 years of experience across structured credit, finance, and technology, and has an extensive background in data and performance analysis, research, and capital markets. He kickstarted his career as an analyst at Fitch Ratings and then transitioned to hedge fund Tricadia Capital, where he rose from systems analyst to senior vice president over his 12-year tenure
• He has worked at dv01 for over five years, and regularly produces in-depth research on dv01 and industry data on asset classes including consumer unsecured, mortgage, student loan, auto and credit cards
  • These reports are available here, and Vadim also breaks down actionable insight from these reports on dv01's podcast In the Tranches of Structured Finance

dv01

• dv01 is a leading capital markets fintech company driving technological innovation and loan-level transparency and loan-level lending data in structured finance.
• Founded in 2014, the company was acquired by the Fitch Group in 2021
• It has over 230 million loans, 1,200 securitizations, and $6 trillion in original balance across the consumer unsecured, mortgage, auto, student loan, point of sale, home efficiency and small business asset classes.
• dv01 was born out of the founder's frustration at the lack of transparency as a mortgage bond trader at Bear Stearns & JPM. Data was scarce, technology was outdated.
• dv01 addresses the challenges by providing analysis-ready data (i.e., clean data) AND embedded analytics (reducing the vendor subscriptions a firm needs), ultimately streamlining their workflow
• dv01 works with both issuers and investors and the company brings a wealth of knowledge to alternative investment firms.

Topics / Questions that Vadim and I discussed on this episode:

• Overall picture of consumer balance sheets, and what performance is like for various asset classes
• The financial health of the American households
  • Loan performance trends (delinquencies, modifications, prepayments) and highlights of certain segments (regions, DTI, FICO ranges)
  • Impact of student loan repayments and broader consumer debt (credit card)
• Discussion of the financial health in Florida in particular where insurance costs have soared recently
• Origination trends
  • How credit underwriting has impacted origination volume
• Economic health of different generations
  • Why Gen Zs' debt management is different to previous generations and why they are in a stronger relative position than Millenials
• Why consumer ABS is poised for a strong year
• Why media reports that subprime auto could be the next credit crisis are potentially inaccurate

Part I of my interview with Lucas Timberlake, General Partner at Fintech Ventures Fund. Luke and I discussed alternative lending business models, what founders of tech-enabled specialized lending startups need to know before raising capital, and some of the red flags he sees in startups who think they have created something unique in the alternative credit space. Part II of our interview will cover related topics in more depth and how fintech lending startups can accelerate originations, deliver unique customer experiences, and more.

Howard Abrahams, Founder and President of Morewood Funding, LLC discusses how companies can access alternative source of lending and debt capital. Howard is ex-MAN Group, Perella Weinberg, and Vida Capital and spent 25 years mostly in sales roles across these alternative asset management firms. He specializes in complex situations and companies overlooked or not financeable by traditional banks and financing sources. He has developed a network of 250+ lenders, primarily finance companies and other specialized lenders who provide various types of lending solutions and debt products to borrowers. His sweet spot is $7M to $12M financings with deals up to $25M and as small as $1M.

Karus is the AI Engine for consumer auto finance. Co-Founder and CEO Aaron Travis and Co-Founder and COO Jamie Harrison join Asset Backed host/creator Andres Sandate for a discussion of the consumer auto lending space. Aaron and Jamie discuss how Karus products and solutions help consumer auto lenders achieve better financial outcomes with cutting-edge AI tools and data analytics.

Consumer auto lenders face numerous challenges including
- manual underwriting & app review
- unsophisticated loan structures & pricing
- lengthy and outdated loan origination processes
- suboptimal lending strategies & decisions
- lack of real-time portfolio performance, predictive analytics & current market pricing capabilities
- inability to manage app flow sources and more.

Aaron and Jamie discuss how their platform helps those active in the auto finance marketplace including indirect lenders, banks, credit unions, private credit firms, asset managers, and more enhance and optimize their existing consumer auto finance underwriting, decisioning, scoring, structuring, pricing, approval, forecasting, Creators & Guests

• Andres Sandate - Host
• Aaron Travis - Guest
• Jamie Harrison - Guest

Description of the Asset Backed podcast and what listeners and viewers can expect if they engage and listen or watch. The Asset Backed podcast will feature 1:1 interviews with investors, asset managers, founders, CEOs, and other professionals executing transactions in this $20 trillion dollar market. My name is Andres Sandate and I am the Founder and CEO of Endurance Strategies, LLC. I have spent the past 15 years working in the alternative investment industry and prior to this I was a debt capital markets banker. You can follow me and engage via the following:
Specialty Finance blog on Substack https://sandate.substack.com/
X/Twitter @aesandate on X,
linkedin.com/in/sandate
email contact@endurancestrategies.com.

I welcome your feedback and suggestions on how to make the Asset Backed podcast and related content most beneficial to your understanding, knowledge, and awareness of this important and growing space.