Fairstone
Fairstone Financial Inc is a non-bank consumer finance company in Canada that provides unsecured and secured personal loans, retail sales finance, mortgages and other ancillary products primarily to near-prime customers across all 10 provinces and two territories in Canada.
Investment Thesis:
- Canadian market leader with a dominant market share in non-prime lending and ~300,000 strong customer base
- Desirable unit economics with strong yields and moderate charge-offs
- Attractive valuation for a market leader
- Solid team with deep market and operational capability, but with significant carve-out revenue and expense opportunities
Value Add:
- Fairstone benefited from JCF’s long-term relationship with a local bank that provided attractive comprehensive financing commitment
- Technology overhaul of existing infrastructure
- JCF led an independent capital structure at closing and significantly improved funding cost and structure thereafter, with securitization program and an unsecured bond
- Transformed marketing into a robust digital marketing capability
- Expanded e-commerce financing and retail point-of-sale financing
Key Details
Location:
Montreal, Canada
Fund:
JCF IV
Subsector:
Specialty Finance
Investment Date:
March 2017
Realization:
January 2021
