Viola reveals growth plans following Cadma joint venture

Viola Credit plans to use a new financing deal with Apollo affiliate Cadma Capital Partners to grow its business by lowering its cost of capital.

In September, the asset manager unveiled an agreement with Cadma which has given the firms a financing capacity of up to $500m (£385m) to execute asset-based lending transactions which are originated and managed by Viola Credit.

Alex Ginzburg (pictured), partner and head of risk at Viola Credit, told Alternative Credit Investor that the firm does not intend to use this funding to seek out new types of investments.

Instead, Viola plans to boost its business by lowering its cost of capital in order to become more competitive to mainstream lenders.

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“It’s a part of our strategic decision to grow,” said Ginzburg.

“Our growth strategy is based not on looking for new verticals or new niche investments, but rather to lower our cost of capital and to be more competitive with mainstream lenders, and to compete with banks and institutional capital at a higher scale.

“As part of this strategy, we are working with insurance companies and big asset managers that have this access to cheaper capital.

“We started this joint venture with Apollo as part of this strategy of getting access to cheaper capital and being more competitive in this market, being able to provide more efficient solutions to our portfolio companies in terms of funding sources that are more scalable and cheaper.”

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