Navigating the Alternative Credit Landscape

Client: Investment holding company (“InvestCo”)
Investment Objective: Seeking superior returns with a balanced risk / reward profile through alternative credit investments.

Challenge: InvestCo, an investor interested in alternative credit, lacked the time and resources to effectively source and analyze the vast array of investment opportunities within this complex and dynamic space.

Solution: We worked with InvestCo to provide comprehensive alternative credit investment solutions:

  • Targeted sourcing: Utilizing our extensive network and market knowledge, we actively sourced investment opportunities across various alternative credit channels, including private debt funds, specialty finance companies, and direct lending platforms as well as issuers themselves.
  • Rigorous investment analysis: We conducted reviews on each identified opportunity, meticulously evaluating factors such as creditworthiness of borrowers, investment structure, risk-return profile, and alignment with the client’s investment goals.
  • Tailored investment presentation: We presented only the most compelling investment options to the client, accompanied by reports summarizing key risks, potential returns, and relevant industry insights.
  • Outcome: Following our presentations, InvestCo carefully reviewed the presented options and conducted their own independent due diligence before making investment decisions. Ultimately, they chose to invest in a diversified portfolio of alternative credit assets that catered to their desired risk profile and targeted return expectations. This mandate covers a significant period of time where we continue the sourcing on behalf of InvestCo with the investment portfolio being built up over a period of time.

Results: The client’s investment portfolio, constructed with the guidance and sourced opportunities provided, delivered superior returns. This success can be attributed to

  • Diversification within the alternative credit space: By investing across various channels and asset classes, the client mitigated risk and maximized potential returns.
  • Focus on risk-adjusted returns: The presented investment options prioritised achieving attractive returns while acknowledging and managing inherent risks associated with alternative credit investments.
  • Independent due diligence: The client’s thorough independent review ensured a complete understanding of each investment before committing capital.

Key Takeaways: This case study emphasizes the value of:

  • Partnering with experienced advisors: Leveraging expertise and established networks can unlock access to a wider range of investment opportunities in the alternative credit space.
  • Rigorous due diligence: Conducting independent research and analysis remains crucial for any investment decision, regardless of source.
  • Balancing risk and reward: Building a diversified portfolio with a focus on risk-adjusted returns allows investors to pursue their financial objectives while managing potential risks.

By providing targeted sourcing, comprehensive analysis, and expert guidance, we empowered InvestCo to navigate the alternative credit landscape, ultimately achieving their investment goals and reaping superior returns.