The LFI Levered Lines Podcast The Nuts and Bolts of Non-Sponsored Lending
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Apr 9, 2025 
Join Aaron Kless, CEO and CIO of Andalusian Credit Partners, as he dives into the world of non-sponsored lending. He discusses how non-sponsored lending differs from its sponsor-backed counterpart, focusing on founder-owned businesses and their long-term goals. Explore the unique challenges of intergenerational ownership transitions in family-run firms and discover effective strategies for sourcing non-sponsored transactions. Kless sheds light on the complexities of executing these deals and why they deserve a place in investors' portfolios.
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Non-Sponsored vs Sponsor Lending
- Non-sponsored lending differs fundamentally in motivation from sponsor-backed deals.
- Non-sponsored businesses often pursue longer horizons and specific business goals rather than quick IRR returns.
Three Pillars of Non-Sponsored Lending
- Non-sponsored deals usually have higher spreads, less leverage, and tighter terms.
- These attributes align with the longer-term, strategic goals of non-sponsored business owners.
Pricing and Terms in Non-Sponsored Deals
- Expect non-sponsored borrowers to rely on lenders to shape pricing and terms.
- Lenders must do extra work to determine pricing as non-sponsored borrowers have less experience in leveraged finance.