Chesswood Group, a specialty finance company with 40 years of experience in the commercial equipment finance market, and investment firm Wafra formed a joint venture partnership to will invest in equipment finance leases and loans originated by Chesswood subsidiaries Pawnee Leasing and Tandem Finance, targeting up to $1 billion in total acquisitions.

Chesswood and its operating subsidiaries will service the assets on behalf of the joint venture. Both Wafra and Pawnee Leasing will contribute equity to the joint venture, with Wafra owning up to 95%. In connection with the formation of the joint venture, Chesswood has agreed to issue to Wafra warrants to purchase 2,067,250 Chesswood common shares at a $10 exercise price, subject to a vesting schedule tied to the closing of acquisitions by the joint venture.

“We are pleased to partner with the management of Chesswood, Pawnee and Tandem and look forward to growing the joint venture meaningfully,” Edward Tsai, managing director at Wafra, said. “As long-term oriented investors, we seek to form durable partnerships with experienced industry leaders like Chesswood. We recognize the attractive fundamentals of equipment finance, adding it to Wafra’s portfolio of high-quality real-asset-backed investments.”

“We are excited to embark on a long-term partnership with Wafra focused on the expansion of Chesswood’s business in the United States. Wafra and Chesswood share a common vision of the opportunities for growth in the U.S. asset-based finance market that leverages the infrastructure and know-how of both organizations. In addition, this agreement builds on Chesswood’s strategic focus to grow Chesswood’s asset management business and increase fee-based revenue,” Ryan Marr, president and CEO of Chesswood, said.