Opalesque INTERACTIVE with Chris Addy: Understanding the operational, legal and due diligence risks associated with fees and clawbacks in private funds
Tuesday, Sept. 10th 11 am ET (4pm GMT, 5pm CET, 6pm Riyadh, 7pm Dubai)
Following the decision of a New Orleans court to over-rule the US Securities and Exchange Commission, regulatory efforts to provide investors with enhanced fee transparency in alternative asset funds have been delayed.
At the same time, funds which face delays in liquidating portfolio companies face the risk of “clawbacks”, where previously distributed incentive fees must be repaid as the overall return of the fund fails to keep pace with the compounding preferred return.
The new Opalesque INTERACTIVE session takes the popular webinar format to a new level. Register now for this insightful and educational session designed to help both investors and managers / GPs understand the operational, legal and due diligence risks associated with fees and clawbacks in private funds.
- Fees and expenses: what is “off market” at both the fund and portfolio company level?
- ILPA fee template and other new initiatives around fee transparency.
- Calculating the waterfall – more complex than just “American vs European”.
- Can managers afford to pay their clawback payments? The risk of Zombie funds and bankruptcies.
You will be able to tune in to this webinar from any computer, tablet, or smartphone. The webinar will be recorded - in case you are not able to join, all registered participants will be provided a link to replay the webinar.
Chris Addy
PAST WEBINARS
Small Managers - BIG ALPHA Episode 15
"Very on point." (XB)
"Good presentation. Could I get some material and possibly have a one on one call?" (LC)
"Great presentation. I will be in touch." (ES)
"Excellent job, Ian" (MJ)
"Very interesting. Will be in touch!" (FV)
Tuesday July 9th 2024
With larger quantities of capital chasing the same Alpha strategies and continuing to erode Alpha, savvy investors are turning to smaller and/or emerging managers as they look for alternative sources of return.
Episode 15 of this ground breaking webinar series presents you another carefully screened panel of investment managers worth taking a look.
In one hour, you'll meet them all, get to know their top quartile strategies, and - since this an interactive session - can ask your questions.
Essential Realty Partners (Essential) is a premier private equity real estate firm specializing in multifamily investments across the United States. With a focus on rental housing as a basic need investment, Essential has successfully deployed and managed capital across more than 50,000 units nationwide. The firm's extensive experience and deep understanding of the nuances, best practices, and strategies that contribute to success enable them to provide investors with institutional-level investment opportunities through a diverse array of funds and customized investment structures.
Essential's investment strategy centers on acquiring multifamily and build-to-rent (BTR) communities in carefully selected target markets nationwide, managing each asset to maximize investor income and foster community growth. The firm's Principals bring over 120 years of combined industry experience to the table, having successfully navigated four decades of real estate investment cycles. This wealth of knowledge is complemented by ERP's cutting-edge platform, which integrates proven processes with advanced AI, automation, and predictive analytics technology, empowering the team to make informed decisions ahead of the competition.
Strategy Highlights:
- Essential was founded in anticipation of the current market dislocation and distress – with the founder’s knowledge that the best time to build a large-scale portfolio is in the early stages of a new cycle.
- Essential’s founders have amassed $1b of potential dry powder through their existing relationships with the understanding that equity will be difficult to obtain when the market cycle is at the bottom – and pricing is at its most advantageous.
- This Series A offering presents an opportunity to own a direct interest in Essential’s GP operating company, known as a GP Stake, as Essential embarks on a new national portfolio build targeting $2.3b in AUM build during the trough of the cycle.
- A GP Stake offers asymmetrical private equity return potential through its attractive fee, investment, and carried-interest revenue streams. At scale, this business model provides strong operating margins with high-yield dividend and enterprise value potential.
- The Series A investment is preferred equity senior to Essential’s common equity and carries a 10% annual coupon rate payable as earned. The founding partners anticipate an exit event in 5 years providing investors with an opportunity to harvest gains. Due to the legacy “cash-cow” type dividends anticipated in year 6, investors will have the option to harvest gains and/or retain a portion of their position for generational cash flow and appreciation.
- Management is targeting a 50% IRR and a 6.9x MOIC on a 5-year hold for its Series A investors. This is a pre-institutional round limited to $850,000 in total, on a first-come, first-serve basis, with a minimum investment of $50,000. Available to accredited or qualified investors only.
With a team of seasoned professionals led by Rick Courtney (CEO), John Azar (Capital Markets), Mark Gardner, Esq (Development), and John Matheson, Esq (President, COO & General Counsel), Essential Realty Partners is well-positioned to capitalize on the current market opportunity and deliver asymmetrical return potential to its investors.
The Katch Litigation Fund, managed by Katch Investment Group, is an innovative investment opportunity that delivers targeted returns with a strong focus on risk and liquidity management. The fund's strategy centers on disbursement funding, which includes financing both small-size, short-duration claims and larger claims where groups of claimants collaborate to seek compensation in court. The fund also targets larger, complex legal cases with substantial financial stakes through portfolio funding.
Strategy Highlights:
- Specialization in the UK financial services sector: By concentrating on this sector, the fund enjoys lower credit risk, higher diversification, and better liquidity compared to typical litigation funds.
- Dual strategy for predictable returns and capital preservation: The fund prioritizes structuring facilities and creating collateral, using low-value, fast-moving claim types to extend full recourse loans with insurance wrappers that preserve capital and often returns.
- Attractive returns:The fund targets a 16% net return per annum for USD institutional investors.
- Experienced team: Led by Laurent Jeanmart, Founding Partner at Katch, with over 20 years in asset management focused on alternatives, the Katch Litigation Fund boasts a specialized team of seven experts, alongside a dedicatedaudit team of six ensuring constant monitoring.
- Robust fund structure: The Katch Litigation Fund is a Luxembourg-based SICAV-RAIF S.A., with reputable service providers such as Funds Avenue (AIFM), Bolder Group (Administrator), and KPMG (Auditor).
The Fund presents a compelling opportunity for investors seeking exposure to the UK litigation finance market, offering the potential for attractive risk-adjusted returns through a well-diversified portfolio managed by an experienced team.
As of April 2024, the fund has achieved a year-to-date net return of 5.58% for its USD Institutional Class I shares, with a 12-month net return of 17.67%. The fund's assets are allocated across disbursement funding (45%), portfolio funding (33%), and other strategies (23%).
VanEck, a renowned investment management firm with approximately $101.9 billion in assets under management, introduced the cutting-edge Digital Assets Alpha Strategy (DAA) in June 2022. DAA is a long-biased liquid token strategy that aims to generate alpha through token selection and risk management.
The Strategy's investment philosophy is built on four key pillars:
- VanEck expects digital assets to take share from traditional assets in the coming decade.
- The Strategy takes a cash-flow based valuation approach to digital assets, aiming to own the winning projects that will outperform the market.
- The portfolio is constructed and actively managed to deliver strong risk-adjusted returns.
- The Strategy is managed by a seasoned team of professionals with extensive experience in digital assets and traditional finance.
Strategy Highlights:
- DAA focuses on deploying capital across five key investable themes: Core Infrastructure, DeFi Building Blocks, Upgrading TradFi Rails, Web3 & The Creator Economy, and Decentralized Physical Infrastructure (DePIN). By investing in these themes, the Strategy seeks to capitalize on the growth potential of the digital asset ecosystem.
- The Strategy's investment process involves a rigorous token selection criteria, focusing on projects with strong network effects, quantifiable benefits over legacy systems, great teams and communities, and cash flow based token value accrual.
- Portfolio typically holds 10-30 assets, with the flexibility to adjust for adverse market conditions.
- Risk management is a key priority for DAA. The strategy employs quantifiable downside hedging, maintains a 10% individual position size limit to minimize concentration risk (excluding Bitcoin, Ethereum, and Equity/Convertible Debt positions), and limits each position to 5% of the token's circulating supply to ensure liquidity.
How emerging market fund manager Kevin Dougherty outperforms in Crypto, Web3
"Super interesting webinar! I found it awesome! Thank you again." (ON)
[more feedback]
"Thank you so much!" (CK)
"Excellent points made Kevin!" (LS)
Tuesday, June 11th 2024
Cryptocurrencies and Web3 protocols represent a new and exciting asset class with the potential for explosive growth. Like other early-stage asset classes, such as Emerging Markets during the 1990s and 2000s, institutionalization of crypto is driving significant price gains due to its superior risk/reward and asymmetric upside potential. And with user growth closely mirroring previous transformational technologies, the crypto industry is still in its early stages, with mass adoption yet to come. For example, Web3 is massively undervalued - you can buy the whole of DeFi for less than the market cap of PayPal. In these early days, it’s the builders who see best where the real value lies.
Join us for an Investor Workshop featuring Kevin Dougherty, Managing Partner of BR Capital's Digital Assets Hedge Fund (SP2). With over 20 years of experience in financial markets, Kevin's focus has always been on analyzing and managing assets in emerging asset classes, including Emerging Markets Equities, Commodities, and Cryptocurrencies. His experience as a fundamentally driven emerging market hedge fund manager uniquely qualifies him for the emerging asset class of crypto and Web3.
In this webinar, Kevin will discuss:
- Why cryptocurrencies represent a superior investment opportunity akin to emerging markets in the 90s/2000s.
- While Crypto is cyclical like tech, it's not a bubble like tulips. Bubbles do not repeatedly reflate. At the same time, as with other asset classes, risk management and experience are still key to control volatility and downside risk.
- This shows in the performance of BR Capital's liquid quant fund where proprietary crypto trading technology has produced an CAGR of 66 in BTC (i.e. excluding BTC growth against USD) while BR18 Web3 VC fund's administrator-approved gross NAV at end of Q4 2023 is 6x initial capital after three years.
- Lessons from institutionalizing other asset classes that apply to crypto
- How BR Capital's investor-builder ethos has given the firm credibility among top Web3 founders and teams, resulting in early-stage opportunities and a track record that demonstrates their ability to beat tier 1 VCs to the table.
- The key advantages of decentralized finance (DeFi) over legacy finance
- Why the Global Regulatory environment – the biggest risk to cryptocurrencies – has improved greatly in recent months
- Why Cryptocurrencies are critical infrastructure for the NextGen Digital Economy, with huge advantages over an alternative digital future controlled by a small handful of US and Chinese Big Tech companies
How to Access Mission Critical Investments in AI, Aerospace & Defense
"Very on point." (XB)
"Good presentation. Could I get some material and possibly have a one on one call?" (LC)
"Great presentation. I will be in touch." (ES)
"Excellent job, Ian" (MJ)
"Very interesting. Will be in touch!" (FV)
Thursday, May 16th 2024
Whenever topics become 'hot', differentiating substance from opportunism is a key driver of successful long-term investment returns.
In this webinar, we will introduce you to some of the leading specialized investment managers in two areas of technology we believe will shape the next decades and are already of significant geopolitical importance:
- Aerospace & Defence and
- Artificial Intelligence.
Join this live Investor Workshop and learn and interact with investors who have been in these fields for decades and invested in it long before it became flavor of the day.
In addition to offering significant potential for financial returns, engaging and participating in these themes empower investors to make a positive impact through investments that align with the continued development and expansion of these themes.
Small Managers - BIG ALPHA Episode 14
"Tight, sharp, clear, passionate." (AG)
[more feedback]
"Great session and excellent moderation" (TO)
"Excellent format" (SE)
"Great job" (TY)
"Wonderful format" (NEF)
Tuesday March 26th 2024
With larger quantities of capital chasing the same Alpha strategies and continuing to erode Alpha, savvy investors are turning to smaller and/or emerging managers as they look for alternative sources of return.
Episode 14 of this ground breaking webinar series presents you another carefully screened panel of investment managers worth taking a look.
TradeWinds Asset Management is a US-based Registered Investment Advisor run by Founder and Chief Investment Officer, Christian D’Urso, who has been active in the financial markets for twenty years. The firm specializes in constructing portfolios of stocks, mutual funds and ETFs, managing $125m on behalf of investors across the US through their offices in Oregon and Rhode Island.
TradeWinds is the investment advisor to a hedged equity strategy which launched in January 2024, applying a nuanced approach to achieve its objective of significant equity returns with constrained volatility and controlled drawdowns. This long-biased approach is based on an existing stock strategy managed by Tradewinds that has been running live with audited returns for the past four years.
Strategy Highlights:
- Portfolio consisting of 15-30 large cap stocks having strong momentum selected from a global universe of approximately 400 through the application of rigorous quantitative methods.
- Proprietary risk overlay called Adaptive Beta that utilizes a rules-based methodology to adjust leverage, exposure and hedging based on proprietary signals identifying the prevailing market state.
- Dynamic Hedging Program using the combination of put and call spreads designed to constrain volatility and avoid large drawdowns while maintaining the significant opportunity for upside return capture when momentum is dominant.
“The 100s of trillions of dollars in the global financial system contain measurable and actionable trends that produce outsized moves in individual securities over months and years. We have developed a proven and systematic way to identify where the global bull markets are occurring and within those markets which stocks have significantly enhanced potential for outperformance. In addition, we have developed robust and scalable tools for identifying when to add and remove risk from the portfolio.”
Christian D’Urso, Founder & CIO at TradeWinds Asset Management
Ironshield Capital Management LLP is a London based Investment Manager run by Founder and Chief Investment Officer, David Nazar, who has devoted over two decades to credit investments. The firm manages concentrated liquid portfolios of event driven, stressed and distressed credit, focused on actively traded bonds, loans and other corporate securities with events typically crystalising within 3-6 months. The team uses a probability and scenario driven approach to evaluate opportunities and assess risk.
The firm manages range of strategies spanning the liquidity spectrum, offering a platform to investors including UCITs, hedge funds and closed ended structures.
Strategy Highlights:
- Opportunity set at its biggest level ever €700bn+
- Credit indices are priced for 5 to 6% annual default rates over the next 5y.
- Portfolio typically consists of 20-30 bonds, loans and CDS
- Issues from EU and Western European stressed and distressed credits (typically B-CCC-D)
- Consistent returns throughout the market cycle
The investment team’s objective is to achieve high absolute returns across the strategies by exploiting periods of market mispricing caused by operational and capital structure changes in credits. Our strategy is a unique combination of limited downside capture and high absolute returns which is achieved by high-quality, deep and rigorous credit analysis. Given that there is a scarcity of high yield and event-driven credit experts in Europe, there is a growing gap between expanding opportunity sets and the number of people like us exploiting them. Our methodology has been developed, implemented and refined over the past 16 years. It has now been successfully tested throughout several credit cycles.
David Nazar, Founder & CIO at Ironshield Capital Management
Aura Ventures is a thesis led, high conviction investor focusing on Seed stage technology companies in Australia and South East Asia.
Since launching the strategy in 2013, Aura Ventures has deployed c. $55m into 22 companies and delivered an average TVPI of 2.1x and DPI of 0.74x across all fully deployed fund vintages. The Fund’s success in the asset class to date can be attributed to their thesis driven approach to deal origination and selection, due diligence program and an active approach to portfolio management through to exit.
Aura Ventures is part of Aura Group, a Wealth and Funds management firm founded in Australia in 2009 with head office in Singapore and a growing footprint across Asia Pacific.
Since 2013, Anbruggen Capital has been at the forefront of crypto investing, actively involved in the development of crypto-based funds. This translates into a decade of experience, a team driven by continuous learning, and a deep understanding of the crypto landscape.
Anbruggen Capital employs a blend of top-down and bottom-up research to strategically analyze and invest in a wide range of cryptocurrencies. Their core expertise lies in deep value, research-based discretionary strategies focused on:
- Next-generation blockchains
- Decentralized finance (DeFi)
- Blockchain gaming/metaverse
- Adjacent assets
Join the Crypto Revolution with Thomas Bleimuth and Anbruggen Capital.