New Lifeline for Canadian Borrowers SAF Insurance-Backed Lending Strategy
- SAF Group has partnered with American Life and GQG Partners to launch a reinsurance vehicle controlling up to C$2.5 billion, mimicking the "permanent capital" model of giants like Apollo to fund Canadian private credit.
- The capital will support loans of C15milliontoC250 million for underserved borrowers like mortgage pools and private equity funds, addressing liquidity shortages in the Canadian market.
- SAF aims to capitalize on higher Canadian yields often 100-200 basis points above the US by providing flexible financing to entities facing withdrawal restrictions from traditional lenders.
The Canadian private credit landscape is witnessing a significant evolution as mid sized players begin to adopt the strategies of global giants. Calgary based SAF Group is leading this charge by launching an innovative insurance backed investment vehicle designed to inject liquidity into a market starved of flexible financing. Partnering with Nebraska’s American Life & Security Corp. and the private capital arm of GQG Partners, SAF has created a reinsurance structure that grants it control over approximately C2billiontoC2.5 billion in assets. This move mirrors the "permanent capital" model pioneered by industry heavyweights like Apollo Global Management and Brookfield Corp., allowing SAF to offer long term loans ranging from C15milliontoC250 million to borrowers such as mortgage investment corporations and private equity funds that often struggle to secure funding from traditional banks.
This strategic pivot comes at a critical time for Canada's credit market, which is grappling with liquidity pressures. Several prominent funds, including Kensington Capital Partners and Trez Capital, have recently restricted investor withdrawals due to cash flow constraints. SAF aims to fill this void by lending directly to these stressed entities, focusing on senior secured loans backed by diversified pools of capital with conservative loan to value ratios often below 10 percent. By leveraging insurance capital, SAF secures a stable funding base that is less susceptible to the volatility of public markets, giving it a unique advantage in stabilizing the Canadian middle market.
For borrowers, SAF’s entry offers a lifeline in a financial environment where options are limited. The firm argues that the Canadian market is particularly attractive, offering yields that are generally 100 to 200 basis points higher than comparable deals in the United States due to a less crowded lender universe. With returns historically exceeding 16 percent annually, SAF is betting that its specialized knowledge of the local landscape combined with this new financial firepower will allow it to reshape domestic lending. As CEO Ryan Dunfield puts it, this structure provides the firm with the same tools as its larger US counterparts but with a laser focus on Canadian needs.