Ideal US Small Business Loan Fund – Craig Reeves
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Craig reeves BG, Opalesque Geneva:
SMEs (small and medium-sized enterprises) are the backbone of the American and European economies. The 30 million SMEs in the United States have accounted for almost two-thirds of the net new jobs in the private sector in recent decades. SMEs that export tend to grow even faster, create more jobs, and pay higher wages than similar businesses that don’t.
Small businesses represent a significant portion of small business borrowing: the loans granted to them are split between banks and finance companies, around 50/50 depending on the year. Total loans guaranteed by the US Small Business Administration in 2019 were $ 28 billion.
Since the introduction of the Dodd-Frank Act in the United States in 2010 (to protect the banking system from the systemic threats it faced in 2008), many SMEs have found it more difficult to obtain the financing they so desperately need. need to survive and grow. This need for liquidity facilities has increased since the onset of the COVID-19 crisis and SMEs have turned more to non-bank finance providers.
âUS bank lending rules (like Dodd-Frank) since the financial crisis have hurt many small businesses,â Craig Reeves, founder of the Prestige Group, a private lender, told Opalesque. In addition, Covid 19 increased the demand for financing at the height of the pandemic, as many small businesses suffered from reduced cash flow. With the recovery / revival that followed, demand in most sectors of commerce and industry grew dramatically, the economy opened up, and companies began to hire more staff, hold larger inventories, and expand their operations and customer base. “
Private loans have therefore become even more attractive and companies that focus on private debt are reaping the rewards. Prestige Corporate Financing Opportunities (BFO) Class I USD, for example, compounded 4.6% of net returns from January through August.
Prestige founder Craig Reeves will be giving a presentation at the Small Managers BIG ALPHA Episode 4 webinar on October 21.
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BFO I-Class focuses on direct asset lending to SMEs primarily in the United States. It invests in short and medium term commercial loans, industrial loans and working capital credit facilities.
The Cayman-domiciled fund is managed by London-based Prestige Fund Management Ltd, which is part of the Prestige group.
âWe do a lot of construction and electrical service loans,â Reeves said. “These are areas where we find that SMEs have to turn down work to existing clients even because of cash flow issues. Contractors regularly face cash flow issues caused by issues beyond their control. Many have stepped up the pace. competition in the bidding process – for example for municipal contracts. They have to meet wage obligations and pay suppliers. But they also have to manage loan covenants and manage debt overhang. This can be a complex challenge. even before we introduced the change in the national lending landscape caused by Dodd-Frank.
âThat said, we work with many other industries as well. For example, we’ve loaned to companies in the mobile game development industry, where companies operate on hire-purchase contracts that require software development and software development. Operational milestones to be met. Master Factoring facilities can help game companies migrate from self-publishing to more lucrative work opportunities in this rapidly growing market. ”
The absolute return fund aims to outperform traditional equity and fixed income investments in terms of annualized market-based risk. This is achieved by maintaining strong loan criteria, a rigorous selection and appraisal process, which often results in a lower risk of loan default. Most lending activity is secured by a range of assets, such as accounts receivable, inventory, equipment, machinery, vehicles, or real estate. Where possible, obligations on bank accounts and personal guarantees are taken from the directors and controllers of the underlying borrower.
Over the medium term, the investment strategy has always maintained close to zero volatility and close to zero correlation with traditional equity markets and has consistently outperformed them in terms of absolute return. The fund is up 4.6% (net) YTD (at the end of August), against -1.2% for the US S&P Treasury Bond index – and 0% for US bank rates. Since January 2009, the strategy, which totals $ 67 million in assets under management, has annualized 8.8% with no negative year, compared to 2.3% for the S&P Treasury Bond index and 0.57% for bank rates.
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Founded in 2007, the Prestige Group manages approximately $ 1 billion in assets and has raised over $ 2 billion in fund investments and $ 300 million in wholesale debt. Its 120 team members are based in the UK, Malta, Luxembourg and the Cayman Islands. Prestige specializes in direct loans to small businesses, primarily in the UK and US. She holds interests in several specialized and specialized financial arrangers, among which Capstone Capital Asset Management, Inc. thousands of transactions.
Next webinar:
Small Managers – BIG ALPHA Episode 4
When: Thursday, October 21 at 10:30 a.m.ET
Free registration: www.opalesque.com/webinar/
With larger amounts of capital pursuing the same Alpha strategies and continuing to erode the Alpha, savvy investors are turning to smaller and / or emerging managers as they seek other sources of return.
We are proud to bring you Episode 4 of this groundbreaking webinar series featuring the carefully selected panel of investment managers:
– Heeten Dosch, Doshi Capital management
– Craig Reeves, Prestige Funds
– Randy Baron, Mountain peak Associates
-Andreas Schweitzer, Arjan Capital city
Associated article:
17.June.2021 Opalesque exclusivity: “The timing is exquisite” for an alternative credit fund manager specializing in loans to SMEs and green infrastructure
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