MONACHIL CAPITAL PARTNERS LP

Thesis

The firm focuses on opportunistic, asset-backed, senior secured investments, originating unlevered, privately negotiated deals. Their strategy emphasizes a process-driven approach to generate alpha through creative and disciplined credit investing, aiming for attractive risk-adjusted returns with a capital preservation-first mandate. Monachil specializes in asset-backed lending, utilizing collateralized lending structures like rediscount lending or warehouse lines of credit to advance capital against pools of cash-generating financial assets such as loans. This approach prioritizes the credit quality of the underlying collateral over solely relying on the business's trajectory. The firm targets specialty finance originators with loan books under $30 million, a market segment they believe has been significantly impacted by bank retrenchment, creating favorable transaction terms. Their strategy involves lending at a discount against collateral, with originators retaining a material first-loss exposure. Monachil seeks first-lien seniority in the capital stack and employs strong security packages and covenants to mitigate downside risk. The firm invests across complementary strategies in both private and public structured credit markets, seeking dislocations and relative value. Their investment verticals include consumer finance (personal loans, auto loans and leases, student loans, home improvement loans), commercial finance (equipment financing and leasing, working capital loans, trade finance), corporate finance (broadly syndicated loans, middle market lending), and transportation (aircraft loans & leases, railcar financing, shipping containers, product, dry bulk financing). They also engage in other areas like factoring and invoice financing, asset-based lending, and merchant cash advance. As of December 31, 2025, Monachil Capital Partners managed