Malta-based fund manager Prestige Capital Management (PCM) has added an institutional share class to its Commercial Finance Opportunities Fund, an Experienced Investor Fund that focuses on receivables finance and asset finance opportunities in the UK.
Additionally the fund structure is a Luxembourg-based SICAV SIF which has recently been brought within a full scope AIFM structure, allowing for a wider range of access to European investor groups.
The fund aims to achieve consistent absolute returns in most market conditions, using a diverse portfolio that carefully manages individual client and sector asset allocation risk. Transactions are procured and managed by one of several specialist, UK-based finance companies (typically owned by Prestige), and emphasis is placed on secured assets, often with personal guarantees of pledged securities which increasingly includes control of the underlying borrowers’ bank accounts and revenue streams.
By investing in a diverse portfolio of factoring and invoice discount transactions, the Fund is able to aim at a consistent return profile that is not correlated to traditional and increasingly volatile equity or fixed income markets. Banking professionals with extensive experience of the UK and US financing markets manage the portfolio, maintaining close contact with the underlying financing clients. Over the past four years approximately GBP£250ml has been lent by the Fund to hundreds of small and medium size businesses.
Craig Reeves, Founder of Prestige and Director of PCM, says: “This new share class has been launched at a time when we are seeing increasing interest from institutions for strategies of this kind, whilst at the same time the level of deal flow origination continues to expand. Loan funds are easy to understand – they are not black box strategies. Managed by banking professionals with solid experience in commercial lending, they offer allocators a return profile that is very different from funds investing in exchange-based markets and offer significantly more value added in terms of ongoing risk management to that of peer to peer type strategies.”
As commercial banks withdraw from lending to small and medium enterprises (SMEs) in the real economy, asset based lending strategies play an increasingly important role in financing this critically important segment, particularly in sectors such as energy, agriculture, construction, manufacturing and engineering.
The fund is domiciled in Luxembourg. The new institutional share class has a minimum investment of USD1,000,000 or currency equivalent. Sterling, US Dollar, Euro, Swiss Franc and Swedish Krona versions are available. There is a 1.5 per cent annual management fee and no performance fee. The fund typically provides up to USD2 million (or currency equivalent) of liquidity on 60 days’ notice.
