Our approach to private corporate debt

With capabilities in Western Europe, including the UK, we focus on corporate debt from issuers that may be too small to access capital markets or those that prefer club deals with a few institutional investors. Opportunities are sourced across a diverse investment universe including investment-grade or crossover small and mid-cap firms from a variety of sectors, with maturities ranging between five and 10 years, typically for buy-and-hold investments.

Our investment philosophy is focused on managing the downside, given the asymmetric risk profile of debt investing. As such, we lend against core, essential assets with asset security. We place high value on financial covenants, and avoid highly subordinated debt positions. We take the view persistent excess returns come via excellent deal sourcing, not extra risk. We therefore avoid the higher risk parts of the credit spectrum and instead focus on sourcing attractive deals the broader market may not see. We also embrace newer sectors and structures that may offer ‘complexity’ or ‘novelty’ premia. The strength and depth of our credit research team provides robust governance and our disciplined investment process incorporates, but is not bound by, environmental, social and governance criteria throughout the life of the asset.

Potential benefits of private corporate debt

Senior private corporate debt can help investors diversify exposures while delivering attractive risk-adjusted returns.

Risk-adjusted return potential

Carefully sourced and structured senior debt has the potential to generate higher yields without unduly increasing risk, helping investors improve their overall risk-adjusted returns.

Diversification

The private nature of the assets can offer diversification benefits versus public market opportunities.

Illiquidity premium

The illiquid nature of the assets typically commands a premium over comparable listed credit.

Key risks of private corporate debt

Investment risk

The value of an investment and any income from it can go down as well as up. Investors may not get back the original amount invested.

Illiquidity risk

Certain assets could, by nature, be hard to value or to sell at a desired time or at a price considered to be fair (especially in large quantities), and as a result their prices could be very volatile.

Complexity risk

Assessing risk implications of multi-layered transactions is challenging.

Private corporate debt team

  • Munawer Shafi

    Head of Structured Finance & Private Debt

  • Nick Tune

    Private Placements Credit Analyst, Private Corporate Debt

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