Narrapuno SPC – Convergence offers investors the unique opportunity to participate in investment ideas, which are created through bank disintermediation. As a result of risk capital based capital requirements banks continuously withdraw from their traditional activity of lending.
The fund concentrates on a diversified spectrum of idiosyncratic mid to long-term financing opportunities: direct lending, asset back lending and trade finance. These structures offer an extremely attractive cash flow profile which generic secondary securities can no longer match at this late stage of the credit cycle.
The portfolio blends two complementary credit based strategies. The key element of the portfolio consists of carefully selected hedge fund managers in the private debt space: Investment opportunities emerges as the financing needs for financially strong medium sized companies widen with banks shifting their lending activities more to public debt markets.
The chosen hedge fund managers have the ability to pick and choose from financially prospering, sound mid-cap companies and impact the structure and the terms of the loans.
The structured credit component focuses on relative value credit managers who have the skill set to diligently analyse and source complex credit structures. Limited liquidity in the space still provides interesting risk prima.