Alcentra’s European Direct Lending strategy aims to generate attractive, risk-adjusted returns by providing flexible capital to middle-market borrowers by developing close, productive relationships with management and owners. Alcentra’s mid-market focus expands across Europe in companies ranging from ~€10-50m EBITDA primarily targeting cash flow generative companies with strong growth potential.
Systematic sponsor coverage brings early opportunities in the merger & acquisition market with a focus on incumbency.
Investing discipline targeting defensive, high cashflow generative sectors with the top six sectors accounting for 70%+ of investing in last four years.
Bilateral negotiations given sole/lead lender status in 90%+ transactions with an experienced in-house legal team driving all commercial negotiations.
Alcentra’s investment philosophy is driven by credit fundamentals. The credit investment process is built around the due diligence of our deal teams. Alcentra performs all due diligence and modelling in-house and does not rely on third party analysts.
Alcentra is committed to maintaining a disciplined, value-orientated approach to investing, with a focus on managing risk and generating consistent potential returns for investors.
Disciplined and rigorous investment process
Alcentra believes that responsibly managed companies are better placed to achieve a sustainable competitive advantage and provide strong long-term growth. As a result, our commitment to implement the six Principles for Responsible Investment and the analysis of E, S and G factors form a part of our standard investment process, which can be further reviewed in our Responsible Investment Policy.
Alcentra’s timeline to responsible investing
The Alcentra European Direct Lending is led by Howard Sharp, Joanna Layton and Alex Walker each co-managing the European Direct Lending investment team.
The team includes more than 30 dedicated investment professionals with a diverse range of backgrounds and expertise. The team also has access to a deep bench of corporate credit investment professionals and sector-focused research analysts with all senior team members employing a hands-on diligence approach and involvement in all aspects of the investment process.
Thomas Gahan is Chairman and Chief Investment Officer of Benefit Street Partners and is head of alternatives for Franklin Templeton.
Chairman, Chief Investment Officer - Benefit Street Partners
Head of Alternatives - Franklin Templeton
Industry since: 1984
Managing Director, Co-head European Direct Lending
Industry since: 1987
Managing Director, Co-head European Direct Lending
Industry since: 2000
Managing Director, Co-head European Direct Lending
Industry since: 2003
Important Information
This material is intended to be of general interest only and should not be construed as individual investment advice or a recommendation or solicitation to buy, sell or hold any security or to adopt any investment strategy. It does not constitute legal or tax advice. The views expressed are those of the investment manager and the comments, opinions and analyses may change without notice. The information provided in this material is not intended as a complete analysis of every material fact regarding any country, region or market.
What are the risks?
All investments involve risk, including possible loss of principal. There is no guarantee that a strategy will meet its objective.
Direct Lending and investments in other debt instruments entail normal credit risks (i.e., the risk of non-payment of interest and principal) and market risks (i.e., the risk that certain market factors will cause the value of the instrument to decline). When originating a loan, a lender expects to rely significantly upon representations made by the borrower. There can be no assurance that such representations are accurate or complete, and any misrepresentation or omission may adversely affect the valuation of the collateral underlying the loan, or may adversely affect the ability of the lender to perfect or foreclose on a lien on the collateral securing the loan, or may result in liability of the lender to a subsequent purchaser of the loan. Finally, under certain circumstances, payments to the lender may be reclaimed if any such payment or distribution is later determined to have been a fraudulent conveyance or a preferential payment.
Bank loans may become nonperforming or impaired for a variety of reasons. Nonperforming or impaired loans may require substantial workout negotiations or restructuring that may entail, among other things, a substantial reduction in the interest rate and/or a substantial write-down of the principal of the loan. In addition, certain bank loans are highly customized and, thus, may not be purchased or sold as easily as publicly traded securities, any secondary trading market also may be limited and there can be no assurance that an adequate degree of liquidity will be maintained. The transferability of certain bank loans may be restricted. Risks associated with bank loans include the fact that prepayments may generally occur at any time without premium or penalty. Investors should carefully consider the risks involved before deciding to invest.
Liquidity risk exists when securities or other investments become more difficult to sell, or are unable to be sold, at the price at which they have been valued. International investments are subject to special risks, including currency fluctuations and social, economic and political uncertainties, which could increase volatility. Derivative instruments can be illiquid, may disproportionately increase losses, and have a potentially large impact on performance.
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