Residual Capital was established by several leading participants in the Australian equipment finance industry to raise and manage a series of funds engaged in underwriting equipment risk. We specialise in providing residual value risk supporting large ticket asset financing structures. The investors in each fund under management will be leading superannuation funds and institutions.
The Residual Capital senior executive and Board have an unmatched depth of knowledge in the Australian equipment finance market. Many members of the Board are current or past General Council members of the peak representative body for the Australian equipment finance industry, the Australian Equipment Lessors Association (www.aela.com.au) which represents $27 billion of plant and equipment funding annually.
Residual Capital is totally independent from any major finance or banking institution ensuring our complete objectivity and flexibility in assessing individual investment opportunities.
In addition, Residual Capital is a “pure” equipment risk investor. We do not propose to act as Principal in underwriting lease or loan receivables and we are not owned by a major industry lender or credit underwriter thereby avoiding any potential conflict of interest with our clients.
Residual Capital will work with clients on projects including:
- Banks and financiers seeking to offer Operating Lease and Rental product to their major client base where an external equipment residual value investor is required to support a funding structure.
- Banks and financiers seeking to develop Vendor Financing opportunities without taking residual value risk against the vendor.
- Independent residual value insurers, investors and financiers seeking to sell down all or part of their existing residual value and equipment risk portfolios.
- Major equipment vendors seeking to offer operating lease or rental terms to their customer base without taking residual value risk in-house in order to preserve revenue recognition.
- Major equipment vendors who presently hold obligations to financiers supporting past operating lease structures who may seek to sell down their exposures in order to recognize the original asset sale.
- Banks and financiers seeking to replace existing residual value guarantees (where the original guarantor’s credit standing has deteriorated).
- Government and semi government instrumentalities and corporates seeking to establish off balance sheet funding lines supporting plant and equipment acquisitions where their relationship lenders are unable to take equipment residual risk in-house.
- Accountants and Auditors seeking to replace “structured” off balance sheet facilities (including so called T&C operating leases) with IFRS compliant structures.
- Corporates seeking to restructure their balance sheets in order to improve ROCE/ ROA and gearing through the off balance sheet refinancing of major plant assets.
- Banks and financiers seeking to mitigate credit risk on facilities through a guarantee from Residual Capital based upon our perception of the equipment risk.
- Financiers and Banks seeking “first loss guarantees” on residual positions.