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.

Private debt accelerated as a large and growing asset class post the 2008 Global Financial Crisis, which caused a structural shift in the supply and demand dynamics that governed lending markets at the time. The implementation of regulatory reforms increased costs and restricted credit appetites from banks which caused them to focus on core areas of the lending market and to retreat from others, especially in respect of loans to private companies in the small and mid-market segment.

In comparison to traditional fixed income, private debt can provide investors with higher yields, portfolio diversification and lower portfolio volatility.

Westbrooke Yield Plus was established to create and maintain a diversified portfolio of higher-yielding private debt instruments investing predominantly within the United Kingdom, with the flexibility to invest into other developed economies.

Westbrooke Yield Plus focuses on providing debt to lower and middle-market companies with EBITDAs of between GBP1m – 10m, currently an under-served market segment, as well as participating in bridging and other short to medium-term real estate-backed loans.

LAUNCH DATE:
2018
FUND TYPE:
OPEN-ENDED JERSEY EXPERT FUND AND CO- INVESTMENT COMPARTMENTS
REGULATION:
JERSEY FINANCIAL SERVICES COMMISSION
TARGET NET RETURN IN GBP:
CASH + 5-7% P.A.

(NET OF ALL FEES AND COSTS)

key investment highlights

33 loans in the portfolio

54% weighted average loan to value

74% of transactions are asset / real estate-backed

99% of transactions are senior / first ranking

investment philosophy

Capital preservation through predominantly asset- / real estate-backed loans with conservative leverage

Investing alongside partners who are experienced and reputable specialist loan originators, arrangers, sponsors, and debt managers

Risk mitigation derived through robust security packages, significant equity cushions and a clear exit strategy