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Investing in Private Debt

Why invest in Private Debt?

Invest­ments in private debt offer the oppor­tunity to achieve attractive returns and stable interest distri­b­u­tions. Due to their high risk protection and stability, they reduce the volatility of the overall port­folio and at the same time offer a yield premium compared to tradi­tional fixed-income invest­ments.

Private debt has expe­ri­enced dynamic growth as an asset class since the end of the financial crisis and this is likely to continue in the future. The upturn is being driven by the regu­latory reluc­tance of banks to lend to the corporate sector and the resulting funda­mental change in market struc­tures.

YIELCO Private Debt is active across the entire investment spectrum, from collat­er­alised senior loans (including asset-based loans) to subor­di­nated mezzanine financing. In the area of direct lending/senior loans, YIELCO Private Debt offers its investors a conser­v­a­tively orien­tated product port­folio with low risk and high yield stability. Furthermore, YIELCO Private Debt distin­guishes itself through its offering in the area of collat­er­alised specialty financings with a strong asset focus and an attractive yield premium (specialty lending). YIELCO’s private debt funds of funds therefore represent an inter­esting addition to the port­folio for both new and expe­ri­enced investors.

Fund of funds

YIELCO’s Private Debt fund of funds offering comprises of two programme series that pursue different strategic focus. The senior debt programmes, the majority of which are geared towards European companies, focus on direct lending strategies in the lower mid-market. The specialty lending programmes are posi­tioned in a diver­si­fying manner to the classic senior debt strategy and have an investment focus in the area of higher-yielding special financing with high asset protection. Never­theless, the strategy is located in the senior secured segment. With their respective products, both programme series target a port­folio with typi­cally around 15 fund commit­ments (primaries and secon­daries), which leads to a broad diver­si­fi­cation of more than 300 loans.

  • YIELCO Senior Debt I, 2017
  • YIELCO Senior Debt II, 2024
  • YIELCO Specialty Lending I, 2020
  • YIELCO Specialty Lending II, 2024

Customised mandates

YIELCO’s Private Debt offering comprises of the indi­vidual, customised devel­opment and expansion of a private debt port­folio across the entire strategy spectrum. The investment focus of the indi­vidual mandates extends across the areas of direct lending, mezzanine, struc­tured capital and speciality lending funds. Regionally, the managed mandates invest in Europe and the USA, whereby all size segments can be covered. Investment oppor­tu­nities extend across primaries and secon­daries.

  • There is no guar­antee that certain return or income targets will actually be achieved or that a positive return or income will be realised at all. The investment may result in a financial loss. Historical perfor­mance is not a reliable indi­cator of future perfor­mance.
  • There is no guar­antee that the funds will find a suffi­cient number of suitable investment prop­erties (blind pool risk). The target funds/investments and financing are only tradable to a limited extent and are very illiquid. The realised value may be lower than the true value of the investment.
  • Equity and equity-like instru­ments are generally subor­di­nated to debt cred­itors and other cred­itors and holders of senior capital instru­ments. Due to the type of investment, they can be subject to high risks, including total loss.
  • It cannot be ruled out that changes in legis­lation may worsen the compen­sation basis or other regu­latory condi­tions, even for existing projects.