As Nelnet continues to grow, adapt, and evolve to meet the changing needs of its customers and the world at large, the organization identifies new areas of opportunity to strategically pursue. Such is the case with the introduction of Nelnet’s newest business segment, Nelnet Financial Services. Established to help structure the company’s financial assets, investments, and acquisitions, Nelnet Financial Services will fund all our student, consumer, and other loan assets, hedging, and capital markets activity that occur outside of Nelnet Bank. Nelnet Financial Services also manages real estate investments, insurance, and bond portfolios for Nelnet and other businesses. Steady growth of this new business segment is a key focus for Nelnet in 2023 and beyond.
How does Nelnet Financial Services fit with Nelnet Bank?
While Nelnet Financial Services is separate from Nelnet Bank, the division provides insight into financial markets and makes recommendations to the bank related to product development that align with their long-term goals. And, while Nelnet’s long-term strategy is to originate and finance loan products through Nelnet Bank, Nelnet Financial Services is able to acquire, finance, and manage assets and products that can’t be originated via Nelnet Bank due to their return on equity or industry risk measures.
The separation of Nelnet Financial Services from Nelnet Bank is a move designed to provide greater flexibility to the organization by enabling Nelnet to share its market learnings and insights about different loan and financial assets with Nelnet Bank.
Who’s leading Nelnet Financial Services?
Matt Dunlap serves as President of Nelnet Financial Services, leading approximately 50 associates who work across the company’s various teams and departments.
Dunlap most recently held the position of Chief Business Development Officer for Nelnet, providing contributions in internal audit, capital markets, and legal counsel to the organization. He has also served on Nelnet’s Board of Directors since March 2022, as well as on the Board of Directors of ALLO Communications, BankFirst, First Northeast Bank of Nebraska, and Lighthouse, a Lincoln, Nebraska-based nonprofit. Prior to joining Nelnet, Dunlap spent two years providing comprehensive investment banking services to underexposed small public and private companies at GVC Capital, a Colorado-based investment banking firm.
Dunlap is joined by Chief Investment Officer Judd Deppisch, who has a wealth of banking and capital markets experience as well as proven success in new business and revenue generation, developing and managing client relationships, and negotiating, structuring, and executing complex transactions. Prior to arriving at Nelnet, Deppisch served as Managing Director and Head of Consumer Lender Banking/Finance at Capital One for nearly five years. Deppisch also spent over 14 years at BMO Capital Markets, where he held several senior-level positions related to securitization origination and structuring.
What are the top priorities for Nelnet Financial Services?
“Right now, our number one job is thinking through how we want to prioritize our current relationships and where we want to continue to invest. We have partners across real estate, insurance, and specialty finance. We’re in the midst of determining which partners are best for the long run,” said Dunlap.
The division’s top priorities for late 2023 and early 2024 include the following:
- Prioritizing current partners based on long-term alignment and viability
- Portfolio diversification
- Tracking re-insurance underwriting performance
- Taking advantage of real estate investment opportunities
Who are the division’s targeted partners?
Nelnet Financial Services actively seeks partners who demonstrate a shared long-term perspective and exhibit an appreciation for the importance of cash flow rather than solely prioritizing the potential for a future sale to a larger entity. The business segment highly values partners who not only espouse the values they endorse, but also share in the risks of their undertakings and possess a genuine drive to establish sound credit.
Nelnet Financial Services has assumed a strong relationship Nelnet has had for years with Speedway Properties – a Lincoln, Nebraska-owned commercial real estate investment company that owns, manages, and leases a significant amount of retail, office, and industrial property. More recently, the division has added a partnership with Obsidian Insurance Holdings.
Dunlap explained, “Because of Nelnet’s strategic planning and strong financial position, the organization has the luxury and ability to operate with a long-term vision versus a quarter-to-quarter basis. Having a long-time horizon and aligned incentives are two key aspects we consider when looking at new partnerships or relationships.”
Nelnet Financial Services welcomes the opportunity to develop new partnerships that support the division’s long-term investment diversification strategy and build a burgeoning financial foundation for decades to come.