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Alternative Market Briefing

Yield hungry investors stick with private debt

Friday, March 19, 2021

Investors on the hunt for yield are pouring assets into private credit. According to data from Preqin, the asset class is on pace to hit $1.5 trillion by 2025. Hundreds of new funds are fundraising this year and many investors have indicated they are also interested in re-upping with existing relationships.

One firm poised to take advantage of the growth in private credit is Katch Investment Group. Katch is an asset manager dedicated to investing in private debt with more than $800m in investment funds and mandates. Returns across Katch's fund lineup are positive year to date.

The Katch Global Lending Opportunities Fund, a multi-strategy investment vehicle dedicated to lending solutions for small- and mid-sized companies (SMEs) ended 2020 up 6.2% despite the pandemic and is up 0.4% through January according to a performance update for investors obtained by Opalesque. The strategies included in the fund are real estate bridge lending, opportunistic direct lending, factoring and trade finance. The fund has exposure to the UK, Germany, the US, the European Union, Switzerland, Canada, Brazil, and Asia.

Katch's in-house expertise proved to be critical for the Global Lending Opportunities fund according to the performance update. "The Global Lending Opportunities Fund has been able to safely navigate this global crisis by overweighting strategies directly managed by the Katch team, primarily through the bridge lending and credit opportunities segments in Europe," the note said.

Katch also offers two other strategies that are more concentrated approaches. The Katch Real Estate Lending Fund provides bridge and development loans for real estate developers in the UK. The fund focuses on residential and commercial properties, providing liquidity where traditional lenders have retreated. The strategy was up 8.72% and is up 0.74% through January. The firm notes that between the two funds, it has significant exposure to UK real estate, but real estate has remained relatively resilient throughout the pandemic.

Finally, the Katch Factoring Fund, which provides short-term funding for Brazilian small- and mid-sized companies by buying receivables at a discount, has been able to prevail despite Brazil being one of the hardest hit countries in the pandemic. The fund ended 2020 up 8.52% and is up 0.74% through January. Katch invests and manages receivables-backed funds called Fundo de Investimento em Direitos Creditórios (FIDCs) that are regulated and monitored by the Brazilian Securities Commission (CVM).

Looking ahead, Katch anticipates that the demand for short-term lending will remain strong as well investor interest in private credit as an asset class. Stephane Prigent, CEO Katch Investment Group will be presenting his views on the year ahead during Opalesque's upcoming webinar - Corona Fighters REVISITED: Winners of the Winners taking place on March 30.


Next Webinar:

Corona Fighters REVISITED

The "winners of the winners": Strategies that not only performed in Q1 2020 but also during the rebound later that year.
With:
• Stephane Prigent, Katch Investment Group
• Michelle Leung, Xingtai Capital
• Tony Bremness, Laureola Advisors
• Jagdeesh Prakasam, Rotella Qdeck

When: Tuesday, March 30th at 10 am EST
Free registration: www.opalesque.com/webinar/


***

On a separate note, you can listen and subscribe to Opalesque's Clubhouse podcasts here:

Register here if you are interested in speaking at a future Clubhouse session of the Clubhouse Alternative Investment Club: https://www.opalesque.com/clubhouse/


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