Paragon Capital has announced plans to launch a new offshore secured debt fund, following the success of its previous special situation funds, and has opened its US-domiciled fund to insti
Paragon Capital has announced plans to launch a new offshore secured debt fund, following the success of its previous special situation funds, and has opened its US-domiciled fund to institutional investors. Both funds focus on secured debt investments in private investments in public entities, reverse mergers and bridge loans.
Paragon’s secured debt fund makes proactive investments in companies seeking capital for growth, acquisitions or restructuring. Investments are highly structured and include a pledge of collateral and other beneficial protections. The fund aims to generate outsized returns with reduced downsized risk.
Says Alan P. Donenfeld, the fund’s general partner: ‘Given the volatile economic climate, we are able to make investments into strong growing companies whereby we can obtain a secured debt position to protect our downside risk, but we maintain a conversion right, warrants and additional investment rights for upside gains if the company performs.’
Paragon Capital also has opened its flagship fund to institutional investors. The fund has generated an average annual return of 70 per cent in each of the past three years, significantly outperforming the major indices. The domestic fund is similar to the new offshore vehicle as it also invests in PIPEs, reverse mergers and bridge loans.
‘Given our tremendous track record, solid team, strong access to deal flow and proven ability to execute, we’re poised to continue producing excellent results for our current investors and new investors with limited downside risk,’ Donenfeld says
Paragon Capital’s management team also includes Kevin A. Pollack, a veteran of Banc of America Securities and Brown & Wood, and George Skakel III, president of ABP Acquisition Corp. The firm has offices in New York and Greenwich, Connecticut.