Prestige Funds is launching two new distribution share classes for its Commercial Finance Opportunities Fund (CFO), a Luxembourg based, open-ended SICAV that launched in 2013.
CFO is a direct lending fund that focuses on invoice, asset and commercial finance opportunities, primarily in the UK, and operates a highly diversified investment portfolio of short term commercial and industrial loans.
The new share classes are:
• Distribution ID share classes which are aimed at institutional investors with a minimum investment of USD 1,000,000 (or currency equivalent) and quarterly liquidity (on 90 days’ notice).
• Distribution D share classes which are aimed at advisory investors with a minimum investment of USD 100,000 (or currency equivalent) and quarterly liquidity (on 30 days’ notice).
The launch of these new share classes was prompted by increased investor interest in the CFO strategy from both institutional and advisory clients globally. The new share classes will help to generate more liquidity for investors’ portfolios and be similar to a bond coupon or equity dividend.
Commercial Finance Opportunities was launched in 2013 but since then has grown to almost USD 200 million in assets under management. During that period the Fund has generated an average annualised USD return of 7.35 per cent.
Commercial Finance Opportunities produces returns which are not correlated to bond or equity markets by lending to small businesses looking to scale up their business without usually having to give away equity. It provides a vital source of commercial funding for companies and supports important job creation at a time when many commercial banks are withdrawing from SME lending.
Commercial Finance Opportunities lends to businesses via a specialist commercial loan originator (Finance Arranger) that has lent more than GBP1.1 billon/USD 1.4 billion to more than 5000 small and medium size companies since 2011; demonstrating the relative short-term nature of the portfolio.
During H1/2018, Commercial Finance Opportunities listed on Euronext Dublin making it more attractive and accessible to a wider range of international, institutional investors. Since then, its assets under management have almost doubled. The Fund operates with an annual management fee of 1.50 per cent and has no performance fee.
Craig Reeves ( pictured), founder of Prestige, says: “Investor appetite for private lending strategies has been growing steadily over the last few years as government bond yields have descended into negative territory. With no sign of this trend reversing in the near future, more investors have been investigating private debt funds as an alternative.”