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Asset-based lender JPalmer to partner with institutional investor

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Jun 4, 2024
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Illustration: Eniola Odetunde/Axios

JPalmer, an asset-based lender, plans to partner with an institutional investor for all its capital needs, CEO Jennifer Palmer tells Axios exclusively.

Why it matters: The firm, which focuses on women-led and founded businesses, will now spend more time lending rather than fundraising, she says.

Zoom in: The firm is in the final stages of locking in the institutional investor for a single tranche larger than the $90 million it set out to raise last year, Palmer says.

  • It should be completed within the next several weeks, and it will fulfill its capital needs for the next two years, she says.

Catch up quick: Since it was founded about 14 months ago, JPalmer has deployed more than $100 million, primarily across retail and consumer companies, Palmer says.

  • The money was raised from a mix of ultra-high net worth individuals and family offices and backed lines of credit provided to fewer than a dozen businesses, she says.

What's next: Currently, 50% of JPalmer's portfolio is either women-led or founded businesses, but it will get to a majority this year, Palmer says.

What they're saying: Before founding JPalmer, the CEO served at large institutions where she had the opposite problem of having too much money to deploy, she explains.

  • She says raising capital herself has made her a better partner to her clients, particularly those in CPG, given a difficult fundraising environment.
  • "Now I can truly empathize with what founders are going through in terms of raising money," Palmer says.

Behind the scenes: JPalmer sources many of its deals from sponsors for their early-stage portfolio companies.

  • The capital is typically plowed into scaling the business such as purchasing inventory, she says.
  • Her firm lends off of prime and is a couple of points more expensive than banks.

The intrigue: Theoretically, it should be a good time to borrow, with lots of money poured into private capital markets in recent years, Palmer says.

  • There's plenty of competition for deals, even though traditional bank lenders are tightening up, she says.

Yes, but: Deals are also more difficult to close because "budgets are more optimistic than results," with firms "beating each other up over rates and structure," Palmer says.

  • Plus, interest rates are higher than in previous years, which is still an issue, and there are more covenants, Palmer says.
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