The Pacific Liberty Alternative Debt Fund is a Singapore regulated fund.
The Fund strategy is a non-traditional approach to generating income – through allocating to selective allocations to a universe of broad range cash or asset-backed, securitized credit, low-risk, low-beta investment strategies, and to provide custody of cash assets including:
- Invest in fixed income assets, bonds, short term loans in the form of senior debt, mezzanine, special situations and other asset-backed or securitized;
- Invest in institutional level bank leveraged debt and arbitrage trading;
- Invest in wholesale funding for first loss & stock lending providers;
- Invest in trade financing, factoring and capital secured financing programs or discounted securities.
Such investments are intended to be made through equity, debt, fund, and physical instruments, or a combination.
The investments are dynamically allocated and rebalanced depending on performance and other technical measures to optimize the portfolio for risk and return.
The Fund pays dividends quarterly.
What is a private debt fund?
A private debt fund specialises in lending activity and raises money from investors and lends that money to companies. It represents an alternative to bank lending as well as providing investors with exposure to the more bond-like returns occurring from private debt as an asset class.
Investor interest in private debt is increasing because of the low yields available from government bonds. This means that many institutions are being forced to seek alternative sources of yield from a market with interest rates still at a record low.
A private debt fund does not invest in public markets like stocks. Instead, it provides and manages a portfolio of loans which can be of various sizes and worth many millions of pounds. A private debt fund will typically employ lending teams who have strong backgrounds in commercial banking and expert knowledge of the market they work in. There are many individuals of this calibre who have made the move from banking into fund management in recent years.
Private debt vs private equity
Private debt covers loan finance which is when money is lent to a company to fund ongoing operations or the improvement of infrastructure. Frequently the loan will be secured against an existing asset, like property, but private debt funds do not seek to own companies. Private equity funds, by contrast, will typically own some or all of a company.
Private debt funds can sometimes be open-ended, while private equity funds will often be closed-ended and with a limited lifespan. Private debt generates returns from interest in loans, while private equity funds seek to generate returns by increasing the value of portfolio companies.
Senior loans made to mid-market companies without an intermediary. May include revolving credit lines and second lien loans. Unitranche facilities, which combine different debt instruments under a single umbrella, are also becoming more common.
Differs from special situations (see below) in that it generally involves the purchase of securities in the secondary market, rather than new origination of debt or structured equity.
Debt used for infrastructure development and investment in existing assets, generally with longer terms (30+ years) because of the extended useful life of the assets.
Subordinated debt, generally with features like preferred equity, like warrants—which increase the value of the debt. Mezzanine debt is often used in leveraged buyouts (LBOs).
Real estate debt
The most common real estate debt strategy is direct lending for real estate acquisitions. This may include the buying and selling of securitized real estate loans in the secondary market. Risk profiles vary based on the underlying assets.
Debt or structured equity investments made with the intent of gaining control of a company; generally, one in financial distress. Special situations can include trading in the secondary market, direct origination or distressed debt where the manager believes price dislocation is present.
Debt financing extended to companies with venture capital backing. For entrepreneurs, venture debt serves to extend the runway to exit without further diluting ownership.
The Fund is a fully-integrated debt solutions provider, targeting private equity-backed middle-market transactions. We offer an array of debt alternatives, from first-lien term debt to mezzanine, and preferred equity.
We employ an intensive, loss-avoidance approach, emphasizing consistent performance and preservation of capital. We aim to produce steady cash distributions, low volatility, and attractive returns.