Kettle Creek Overview
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Kettle Creek Strategic Capital LLC capitalizes on the opportunities in small-balance credit and purchases collateralized debt obligations. Kettle Creek generally invests between $1 million and $10 million per transaction and our investments primarily consist of bank loans and other claims or indebtedness.
We purchase collateralized notes utilizing scenario-driven analysis to identify the most efficient manner of maximizing return on invested equity with the least amount of risk. Kettle Creek has an investment edge due to its superior proprietary due diligence tool, its vast network providing superior sourcing and deal execution, and the broad experience of the members and investment professionals.
The Opportunity
The assumption made by most investors is that the opportunities in credit have long since vanished as the credit markets stabilized in the post-2008 period. However, banks are still carrying more “troubled” assets and continue to carry inadequate loss reserves as compared to the entire history of the RTC.
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There has been capital raised in more traditional private equity vehicles designed to purchase and hold assets, but most are unwilling to participate in the more active strategy of note arbitrage. This in itself is an opportunity, but we have focused Kettle Creek towards a more attractive niche.
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Small balance credit, defined as any individual credit valued at less than $10 million, is a segment of the market that is underserved by traditional institutional investors. As banks continue to improve their balance sheets in response to both business and regulatory pressures, the Company is poised to take advantage of a subset of the market where it is not profitable for larger buyers to participate.