Featuring:
Kingscrowd CEO Chris Lustrino sits down with Prath Reddy, CFA and President of Percent, to explore why asset-based securities (ABS) are gaining attention as a compelling alternative to traditional fixed-income investments. Prath shares his personal journey from investment banking to launching a platform focused on private credit and dives deep into how Percent is democratizing access to this growing asset class.
Throughout the discussion, you’ll gain an inside look into how commercial credit works, how Percent underwrites deals, how investors can participate in diversified offerings, and why asset-based financing offers an attractive blend of yield and risk mitigation. Whether you’re a seasoned investor or exploring alternatives for the first time, this session is packed with educational insights and practical takeaways.
Special Guest
Prath Reddy, CFA, is the President and first hire at Percent, overseeing Capital Markets, Credit, Compliance, and Business Development teams. With extensive expertise from senior roles at UBS Investment Bank and Crédit Agricole, Prath brings deep knowledge of investment banking, capital markets, and structured finance. Passionate about bringing transparency to private markets, Prath is also an active investor and holds multiple FINRA certifications.
Key Highlights:
- The origins and evolution of asset-based securities as an asset class
- Why commercial credit is unique and its role in the alternative investment landscape
- Typical return profiles and risk management for ABS
- Fee structure and how investors receive distributions
- Comparison of private credit volatility vs. public markets
- Tax treatment, use of IRAs, and investor experience on the platform.
Q&A
Q: Is there any risk if something happens to Percent?
A: Percent has a backup servicer (Citadel SPV) in place. Each offering is structured via a separate SPV to prevent commingling of funds. In the event Percent were to disappear, Citadel would step in to manage repayments to investors.
Q: Who sets the interest rates on deals?
A: The market sets the rates. Investors place bids within a coupon range, and the borrower chooses how much capital to accept and at what yield at the end of the syndication period.
Q: Are there redemption periods or secondary market options?
A: Percent currently facilitates secondary trades on an ad hoc basis. A formal secondary market is in development and expected to launch by the end of Q2.
Q: What is asset-based financing in simple terms?
A: It means lending backed by underlying assets like receivables or loans, rather than based solely on the borrower’s cash flow. If the borrower defaults, those assets can be repossessed or generate cash to repay the loan.
Q: What kind of investors use Percent? Do institutions get better deals?
A: Percent serves a mix of accredited retail investors, family offices, RIA firms, and institutional funds. While large orders may receive allocation priority for deal integrity, all investors can access the same deal terms. Percent also offers blended note products for portfolio-level diversification.
Q: What’s the shortest duration on a deal?
A: Nine months is currently the shortest duration. These short-term notes help provide investors with liquidity while allowing borrowers time to manage their business needs.
Q: Can I use an IRA to invest?
A: Yes. Percent partners with multiple IRA custodians, including Rocket Dollar and Alto. Most custodians can be integrated upon investor request.
Q: What’s the fee structure?
A: Percent charges a placement fee and a servicing fee. Investors receive returns net of fees, and borrowers benefit from early-stage capital at competitive rates.
Q: What’s the typical return and risk profile?
A: Average returns fall in the low to mid-teens, with an overall platform default rate under 3%. Percent focuses on asset-backed deals with high recovery rates even in the event of default.