International investment operation Prestige and specialist investment advisor Methexis Capital have launched the Commercial Finance Opportunities (CFO), a fund specialising in secured lending to private companies, in the UK.
The arrival of CFO follows quickly on the announcement on 12 August of the purchase by Prestige Fund Management of a significant equity stake in Methexis Holdings (Isle of Man), the parent company of Methexis Capital Advisors, a UK based FCA regulated investment adviser.
The new fund, structured as a Luxembourg-registered SICAV-SIF, invests in a diversified portfolio consisting of short-term commercial and industrial Account Receivables and is currently offered to experienced investors in five currency classes with a minimum initial investment of EUR125,000 (or equivalent).
CFO employs an absolute-return strategy designed to outperform traditional investments in terms of annualised market-based volatility risk. This is achieved via a diverse portfolio that manages individual client and sector asset allocation risk and generates a steady stream of interest income with low default risk both on individual cases and the wider asset class. All transactions are secured on assets (typically outstanding invoices of underlying customers) together, often, with personal guarantees and charges on property pledged by the directors of the borrower.
“The launch of CFO is a response to the increasing popularity, among investors, of non-market based / private finance investment strategies which typically offer attractive consistent positive returns with lower volatility and correlation to traditional equity and fixed income strategies,” says Craig Reeves, director and founder of PFM.
“In the last five years, Prestige and its affiliates have become leading players in this niche area and now operate and advise on over USD400m for a wide range of clients in this space alone. The launch of CFO, as a multi-currency class SICAV, brings this important investment strategy to a still broader investor group. Additionally with UK bank lending to small and medium sized companies remaining significantly lower than five years ago there remains a significant opportunity to fill some of the gap in funding.”
CFO is targeting capital appreciation of six to eight per cent net p.a. on the back of annualized volatility of one per cent p.a.
CFO’s five currency classes are Euros, US Dollars, Sterling, Swiss Francs and Swedish Kroner. Subscriptions are monthly and redemptions are monthly on 30 days’ notice.