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At Bonart-GlobalNet, we are driven by a steadfast conviction that allocating to our Actively Managed Certificate (AMC), combing private credit and private equity investments, is not only prudent but also essential for achieving superior risk-adjusted returns in today's dynamic and volatile market environment.
This AMC aligns with our commitment to delivering long-term value to our investors by diversifying their portfolios and capitalizing on unique opportunities that are often unavailable in traditional asset classes.
This unique combination of mainly attractive direct lending investments and prudent is an all-weather portfolio, benefiting from low volatility and stronger liquidity from the credit allocation and potential upside from the private equity allocation. After meticulous and thorough analysis, Bonart-GlobalNet selected leading global investment managers to manage the diversified strategies in the AMC.
Rationale for Private Credit direct lending allocation:
1. Enhanced Risk-Adjusted Returns compared to other fixed income strategies:
Senior secured direct lending offers the potential for superior risk-adjusted returns compared to traditional fixed-income investments, especially in this high rate enviroment. By providing financing solutions to middle-market companies together with legal claims backed lending, can deliver attractive yields with lower correlation to traditional and more volatile asset classes.
2. Downside Protection using secured lending, strong covenants, and other defensive mechanisms:
The majority of the portfolios private credit loans includes protective covenants, collateral, and other procedures, providing a strong layer of downside protection. These inherent risk mitigation mechanisms help shield investors from potential losses and enhances the overall resilience of the portfolio.
3. More liquid than most other private market investments:
Compared to most other private market assets (PE, direct real estate and infrastructure) that don't have a built-in liquidity mechanism, private credit matures over time thus creating a natural liquidity turnover, providing investors with better visibility.
Rationale for Private Equity allocation:
1. Access to Growth Opportunities:
Private equity investments provide access to a diverse range of growth-stage and value-add companies that are not yet accessible through public markets. This exposure allows our portfolio to benefit from the upside potential of innovative and dynamic businesses, contributing to overall performance.
2. Active Management and Value Creation together with wide private diversification:
Through active involvement in the management of portfolio companies, private equity investments enable us to drive value creation across different private companies in many sectors and geographies. This added value is usually less correlated with public market movements.
3. Benefitting from future decrease in interest rates:
As we are about to start a new investment cycle, private equity investments made at early cycle periods previously delivered strong returns in a a declining interest rate environment.
Conclusion:
In conclusion, our conviction in allocating to AMC alternative portfolio combining private credit and private equity is rooted in the belief that these alternative assets offer a unique combination of attractive risk-adjusted returns, income generation, and diversification benefits. By leveraging our expertise and strategic approach, we are confident in our ability to navigate the complexities of these markets and deliver long-term value to our investors while actively managing risk. This all-weather allocation aligns seamlessly with our commitment to innovation, adaptability, and the pursuit of excellence in wealth management.
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