Investment Bank Solutions

New solutions for FIG clients. Larger access to capital for Capital Markets clients. New fee streams for Capital Markets’s bond placement groups. New offerings for Asset Management clients.

The following presents some context to highlight the specific applications of Stronghold’s financial technology that align most closely with the three key business lines within Investment Banks and their related financial service offerings, which we believe can most benefit from working with Stronghold:

  • FIG

  • Capital Markets

  • Asset Management.

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Financial Institutions Group (FIG)

Financial Institutions Group’s knowledge of bank and insurance sector regulatory capital — particularly its strategic advisory with respect to Solvency II, Basel III, and NAIC-related capital planning  — positions them to understand the benefits of two specific applications of Stronghold’s financial technology for their clients.

Non-Dilutive Capital Raise

A bank or insurer purchases a Stronghold-designed bond sized to collateralize the issuer’s contractual obligation to repay principal, cover program operating costs, and ...

Purchase preferred shares from the bank or insurer.

A variation works for mutual insurance companies that can’t raise capital.
Another variation could have institutional shareholders of the bank or insurance company purchase the Stronghold-designed bond.  

"True sale" of Distressed Assets or Non-Performing Loans (NPLs)

A bank or insurer purchases a Stronghold-designed bond sized to collateralize the issuer’s contractual obligation to repay principal, cover program operating costs, and …

Purchase distressed assets or NPLs from the bank or insurer at 100 cents on the dollar.  

The regulatory and accounting treatment of Stronghold-designed instruments strengthens the regulated entity's balance sheet at closing. 
The program can additionally hire the bank or insurer to conduct the run-off of the distressed assets or NPLs.

Current reported examples of 90‑plus‑day commercial mortgage delinquencies, include:

~$727 million Reliance Standard ~$200 million MetLife

These applications can give an Investment Bank’s FIG team new tools to solve client problems.
We know of no comparable solutions that deliver such benefits.

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Capital Markets

Capital Markets groups serve clients that need money and maintains relationships with institutional and qualified investors.

Our project/acquisition financing programs fit neatly into this business model.  Two examples:

Stronghold/Pendragon brings the project or acquisition — The Capital Solutions group places the Stronghold-designed bond with its investor network (the FIG team’s regulatory knowledge can help to "frame" the sale to insurance companies).  The bond issuer (Pendragon) stands as the client.

The Investment Bank brings the project  or acquisition — (i) Stronghold wraps one of our programs around a Capital Markets group client, (ii) the Stronghold-designed program becomes the institutional investor, and (iii) in an arms-length transaction, the Capital Markets group places the Stronghold-designed bond through its investor network (the bond issuer, Pendragon, stands as a 2nd client).  The scenario produces two sets of fees for Investment Banks and accesses larger pools of capital than any investment bank has previously accessed.

For project or acquisition sponsors Stronghold-designed programs can provide: 

  • Financing at terms and scale otherwise unavailable, 

  • Patient capital (up to a 3-year grace period), 

  • Efficient cost/use of capital (e.g., mezzanine position subordinate to a commercial bank),

  • Alternative to conventional private credit transactions,

  • Alternative to SPACs

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Asset Management 

Typical fixed income strategies include:

  • Sovereign and corporate bonds (developed and emerging markets)

  • High yield, investment-grade credit, and multi-sector bond portfolios

  • Short duration and unconstrained fixed income strategies

We can demonstrate that our offerings can provide:

  • Diversification - our offerings fall within the strategy spectrum yet differ in structure and benefits,

  • Expanded exposures within clients' policy guidelines,

  • Leverage potential (for private wealth clients), and

  • Higher returns, additional guarantees, and backend participation not available to regulated entities.

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Sovereign Solutions