Direct Access to U.S. Multifamily Credit for Liability Driven Investors

Direct Lending SMAs and Loan Participations allow for Liability Driven Investors (LDIs) to gain direct exposure high-quality credits secured by multifamily assets located across the country that generate a spectrum of returns. LDIs can expect all opportunities provided to be fully vetted by Fulcrum through it's proprietary technology platform, LoanCenter, wherein all underwriting, due diligence, structuring and analyses are thoroughly and transparently prepared. Through LoanCenter, LDIs can access loan opportunities on-demand within a centralized platform.

‍Solutions for Banks

Fulcrum’s unique A/B note structure reduces the need for banks to originate high-leverage loans in order to grow their lending business. ‍By partnering with Fulcrum, banks can minimize risk and generate more business by adding a subordinate portion to each loan originated and distributing it to high-yield investors managed by Fulcrum. This structured approach allows banks to easily offload the riskier segment of the loan, while still retaining a low-leverage, income-generating asset to balance short-term deposit liabilities.

Solutions for Insurance 

Insurance companies often focus on originating or purchasing low-leverage credits. However, this constraint can make insurance capital less competitive compared to other lending options available to borrowers. Fulcrum’s A/B note structure combines low-leverage insurance capital with high-yield capital, allowing insurers to continue investing in low-leverage opportunities without taking on increased risk exposure. Given the need for insurance companies to invest insurance premiums consistently, regardless of market conditions, Fulcrum's A/B note structure provides reliable pathways for Insurance companies to balance long-term liabilities while maintaining low-leverage exposure to credits backed by multifamily real estate.‍

Solutions for Private Equity

Over the past five years, significant amounts of capital have been raised during periods of economic uncertainty, leaving much of it uncalled or unused. Fulcrum’s direct lending strategies, through Participations and SMAs, offer Private Equity funds a timely solution for deploying capital into multifamily credit. High-yield strategies are particularly appealing due to the preferred return hurdles negotiated with limited partners. By providing an immediate outlet for capital, Fulcrum helps Private Equity funds mitigate the impact of preferred return liabilities, improving overall fund performance.‍

Solutions for Pensions, Foundations, Trusts, and Endowments

Pensions, Foundations, Trusts, and Endowments often have more flexibility in managing future payout obligations, but management teams must still plan well in advance to meet the needs of their beneficiaries. Fulcrum supports this planning by creating customized investment strategies that align with the long-term goals of these organizations. Whether through consultation or direct lending strategies via SMAs, Fulcrum helps ensure that future commitments are met with confidence.

‍Why LDIs invest with Fulcrum

Fulcrum offers a range of return options for LDIs, providing access to the competitive landscape of multifamily credit opportunities across the United States.

• ‍Loan Structuring: Fulcrum structures all loans in an A/B note structure. The Note A is a lower-leverage product, typically limited by the constraints of a 55% loan-to-value (LTV) and 10% debt yield (DY). The Note B is a higher-leverage product, typically limited by the constraints of an 85% LTV and 6% DY.  The Note A sits senior to the subordinate Note B and receives priority distributions of all interest and principal before the Note B. By bifurcating a higher-leverage loan into two pieces, Fulcrum creates a lower blended rate for the end borrower at a lower cost than equity alternatives. 

• ‍Spectrum of Returns: By bifurcating each Fulcrum loan into a Note A and Note B, LDIs may access credit opportunities yielding a spectrum of returns from core and core-plus to value-add and opportunistic.

• ‍Strategically Competitive: Fulcrum competes by providing accretive leverage just beyond the traditional and regulatory constraints of banks and at a lower cost than equity. Banks are traditionally limited in how much leverage they can provide. Regulatory limits constrain leverage to the lesser of 80% LTV  or a 1.20x property net operating income to debt service coverage ratio (DSCR).