what is private debt?
Private debt, or direct lending, is an investment strategy where non-bank lenders (institutional investors, debt funds, insurance companies and private investors) provide loans (senior, mezzanine and other forms) to support the financing objectives and requirements of businesses, including growth, acquisitions and funding for developments.
Since the 2008 Global Financial Crisis, regulatory reforms (such as Basel III) increased costs and restricted credit appetites from bank credit committees have caused banks to retreat from certain areas of the debt market (including private companies in the small- and middle-market segment). This has been further exacerbated by the recent steep increases in global interest rates, which have caused banks to redirect internal resources away from the writing on new loans in favour of increase portfolio management.
This left a significant void in global debt markets, which is quickly being filled by private investors seeking enhanced returns. In 2019, private debt officially became the world’s fastest growing alternative asset class, having increased from $205bn in private loans extended in 2007, to $1.4tn in 2022 (source Preqin). When compared to traditional fixed income, private debt can provide investors with higher yields, portfolio diversification and lower portfolio volatility.
Westbrooke Yield Plus Plc (the Fund) is an open-ended Jersey Expert Fund which provides investors with a high-yielding, fixed income alternative investment, through a diversified portfolio of 49 predominantly floating rate private debt transactions mainly in the UK.
The Fund provides a unique investment advantage driven by an asymmetric risk / return profile, by focusing on providing loans to lower and middle-market UK companies and real estate sponsors, a significantly underserved UK market segment. In the context of a rapidly increasing interest rate environment, this allows investors to benefit from a target annual return of cash* plus 5% – 7% per annum (currently 9.2% + on a run rate basis) in GBP (after fees and costs).
(NET OF ALL FEES AND COSTS)
key investment highlights
Yielding ~9% + p.a. in GBP £ (net of fees and costs)
Capital preservation focus through senior ranking security
Inflation protection through interest rate linked loans
Significant shareholder and management capital investment in the fund
Experienced local investment team
Tax-efficient investment structure (dividend and/or CGT)
Westbrooke Yield Plus’ track record highlights its positioning as an attractive, fixed-income alternative, having successfully generated predictable, hard-currency cash returns which have outperformed various comparatives since inception:
This page is for information purposes only and is not intended to constitute advice in any form. Any terms contained are indicative only and returns are not guaranteed. This page is not a prospectus, a prospectus for this Fund has been registered with the CIPC, and this offering is subject to the terms and conditions in that prospectus which can be obtained above.
This page does not constitute an offer to sell, or a solicitation of an offer to buy, in any jurisdiction in which such offer of solicitation to sell would be unlawful.