Strategic Credit Investments: Join Silver Spike's $200mn Fund Backed by Exceptional Assets and Cashflow
Silver Spike Capital Solutions, LP has a $200mn target raise, structured as a credit-focused, private equity-style drawdown fund. Silver Spike expects to hold its first close in Q1-2024. The strategy is targeting annualized net unlevered returns of mid-to-high 20’s% (or 3x to 3.5x net MOIC over five years)1 by investing primarily in convertible debt to the cannabis industry’s most established operators and brands. The Fund will also invest selectively in idiosyncratic credit special situations.
Silver Spike anticipates several first-mover advantages as a leading industry incumbent and the first and only pool of capital focused on this opportunity set.
- Cannabis represents a powerful secular macro growth story and is expected to be one of the largest US consumer categories by the end of the decade.
- The high-growth industry has no access to traditional sources of capital.
- The absence of institutional investors provides unusual competitive moats, information asymmetry, and uncommon pricing power for incumbent capital providers.
- Senior-secured credit and equity-linked debt to the sector's leading players can generate risk-adjusted returns materially exceeding similar conventional strategies—with downside protection and little correlation to traditional markets.
- Cannabis credit represents an idiosyncratic and uncrowded investment strategy that is differentiated and comparatively resilient to exogenous factors
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Founded in 2019, Silver Spike Capital is an SEC-registered adviser and private credit alternative asset manager dedicated to the cannabis industry and has led $240m in senior-secured loans to many of the industry’s most established operators.
Silver Spike's platform includes commingled funds, SMAs, an active senior-secured credit co-investment program, and the industry's only cannabis-dedicated Nasdaq-listed BDC.
The firm's partners each have twenty to thirty-five years of investment experience at pedigree asset managers and bank trading desks through various market cycles in credit, direct lending, distressed, special situations, and emerging markets debt.
With little access to traditional sources of capital, the nascent, high-growth cannabis sector provides senior-secured credit and equity-linked debt opportunities with the prospect of risk-adjusted returns materially exceeding similar strategies—with little correlation to traditional markets.