The Fund seeks to generate high current income while secondarily seeking attractive, long-term risk-adjusted returns with low correlation to the broader markets.
12.2% Current Annualized
Distribution Rate*
Paid Quarterly
Portfolio Placement
• Income Generation
• Portfolio Diversifier
Distinguishing Characteristics
Income-focused portfolio allocation by investing, directly or indirectly, in senior secured loans and entities that own a diversified pool of senior secured loans known as Collateralized Loan Obligations (“CLOs”).
The Fund aims to provide investors with:
- 12.2% annual distribution rate in an interval fund format, distributed quarterly
- Exposure to loans with highest payment priority and secured by corporate assets
- Significantly reduced exposure to rising interest rate risk
- Diversification potential to broader markets
Attractive Features of Senior Secured Loans
Multiple market cycle-tested, resilient asset class with low historical impairment rates
Senior
Single highest and most senior position in a company’s capital structure
Secured
First lien security interest in a company’s assets, including cash, receivables, inventory, property, plant and equipment (PP&E) and all other assets
Floating Rate
Helps mitigates against rising interest rate risk associated with fixed rate bonds
Why Accessing Senior Secured Loans via Structured Credit Pools Like CLOs is Attractive
Attractive Distribution Rates
Select structured credit pool tranches like collateral loan obligations (CLOs) have delivered approximately 15% average annualized distributions over the last two decades1
Diversified Loan Pool
Actively managed, diversified pools of senior secured loans issued to large, mature companies across multiple industries
Structural
Risk Mitigation
Built-in structural risk-mitigation features and on-going requirements for each structured credit pool2
Performance Thru
Economic Cycle
Active investment management with non-recourse debt financing contributes to attractive performance across the economic cycle
Lower Interest Rate Risk
Floating interest rates on underlying loans, coupled with minimum interest rate floors, may help diminish negative impact of rising interest rates
Attractive Structure
Low cost, long-term, non-recourse financing, with no forced sales
Accessing Senior Secured Loans through Collateralized Loan Obligations (CLOs)
CLOs are a diversified pool of 150-200 senior secured loans, comprehensively underwritten and constructed by leading institutional investment managers with robust credit expertise.
Credit ratings are provided by third party credit agencies, including S&P, Fitch and Moody’s, and indicate forward looking opinions about an issuer’s relative creditworthiness. A typical rating scale may include AAA, AA, A, BBB, BB, with below BBB- (or Baa3) typically denoting below investment grade.
S = The Secured Overnight Financing Rate (SOFR) is a broad measure of the cost of borrowing cash overnight collateralized by Treasury securities. “Current Yields” are estimated and subject to change at any time.
1 CLO Equity (or CLO equity tranche): The tranche within a CLO that is paid any excess spread. The equity tranche payment is prioritized after all the debt and subordinated tranches. Source: Kanerai, Intex, Markit, Barclays Research, includes CLO 1.0 and 2.0 broadly syndicated loans. Yields do not include return of principal. Represents period from 2003-2023 with average annualized yields of 14.8%, as of December 31, 2023. Does not represent total return experienced by investor. Past performance is not necessarily indicative of future results.
2 CLOs must meet exposure and cash flow requirements as monitored by a third-party trustee including, but not limited to, over collateralization test, interest coverage test, minimum weighted average spread test, credit quality requirements and issuer and industry diversification requirements which seek to reduce risk for CLO investors.
* The Fund’s distribution policy is to make quarterly distributions to shareholders. The level of quarterly distributions (including any return of capital) is not fixed. Effective October 1, 2024, the Fund expects to pay distributions at a floating rate reflective of the underlying investment income generated by the Fund’s investments each quarter. Such distributions are accrued daily and paid quarterly. This distribution policy is subject to change. The level of quarterly distributions (including any return of capital) is not fixed and all or a portion of a distribution may consist of a return of capital. Shareholders should not assume that the source of a distribution from the Fund is net profit. The final determination of the source and tax characteristics of all distributions will be made after the end of the year. Shareholders should note that return of capital will reduce the tax basis of their shares and potentially increase the taxable gain, if any, upon disposition of their shares. There is no assurance that the Fund will continue to declare distributions or that they will continue at these rates.
** The Fund is a closed-end interval fund, the shares have no history of public trading, nor is it intended that the shares will be listed on a public exchange at this time. No secondary market is expected to develop for the Fund’s shares. Limited liquidity is provided to shareholders only through the Fund’s quarterly repurchase offers for no less than 5% of the Fund’s shares outstanding at net asset value and there is no guarantee that an investor will be able to sell all the shares that the investor desires to sell in the repurchase offer. The Fund is suitable only for investors who can bear the risks associated with the limited liquidity of the Fund and should be viewed as a long-term investment.