Capital is still structured for a tangible economy. But value creation isn’t.
Every allocator eventually asks us: “Are royalties like credit or like equity?”
That question made perfect sense in an industrial economy built on factories, inventory, and
hard assets.

It makes less sense in an economy driven by intellectual property, data, and software.
Traditional lending was designed for tangible collateral and predictable amortisation. But
today we are living in an economy where value is created by intangibles.
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Traditional private equity was built around valuation expansion, exits and short-term
thinking. But world-class businesses built on intangibles require long-term strategic thinking.
Recurring IP-based revenues don’t behave like factories. And they don’t require dilution to
be financed.
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Royalty investing reflects that structural shift.

It provides:
- Contractual participation in recurring revenue
- Downside protection without fixed amortisation pressure
- Growth-linked upside without dependence on exit multiples
- Capital aligned with long-duration intangible value

It is not debt.
It is not equity.

It is revenue-participating capital purpose-built for an intangible economy.
For years, the infrastructure to underwrite this at scale did not exist. Data was weaker.
Recurring revenue models were less mature. Institutional frameworks weren’t designed for it.

That has changed.

The rise of scalable IP businesses, measurable ARR and transparent technology-driven
revenue reporting has created the substrate for a new asset class.

The question is no longer whether royalties fit inside an existing bucket.
The question is whether the existing buckets fully capture how value is now created.

At Althera42, we are not trying to fit royalties into a legacy framework.
We are building the institutional architecture for IP-based royalty investing in Europe. We are
combining private credit discipline with structured finance expertise to make this asset class
investable at scale.

Every asset class begins as a misfit.
Then it becomes inevitable.
IP-based royalties are at that point.

Althera42. Building What Endures.

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