Brun Lubert invests in assets having an investment grade rating, or in the absence of a rating by at least one of the recognised credit rating agencies, with a quality considered as equivalent by our analysts.
Higher yield non-investment grade assets have gained traction in recent years. Private equity debt providers have found their way to non-listed real assets and corporates prepared to offer above-benchmark yields.
The higher yield results from the scarcity of funding available to corporates and the illiquidity premium these loans convey. Projects require thorough structuring, due diligence, and research, due to the higher risk involved and the often complicated nature of the transaction.
Private equity debt increasingly replaces bank lending for corporates that have limited access to capital. These loans, known as senior secured debt, are collateralised by the corporation’s assets, to secure the lenders have priority recourse.
