Structured investments blend elements of debt and equity, providing contractual returns and downside protection. They can take various forms, including corporate debt facilities or individual corporate loans (first ranking or subordinated) with attached warrants, options, or conversion rights.

 

Structured financings are often used as a primary capital source or combined with equity raising and traditional debt to optimise capital structures and enhance shareholder value. While they have a higher cost of capital compared to traditional bank debt or inventory/receivable financing, they result in less shareholder dilution than pure equity issuance.

 

Structured financings are ideal for funding acquisitions, aggressive organic expansion, and infrastructure projects needing capital access for at least 18 months to achieve their value objectives. However, they may not be suitable for early-stage businesses that might struggle to meet the contractual rate of return and exit payments.