Revolution Wholesale Private Debt Fund II
The Fund is a leading private debt strategy with quarterly cash distributions. (Wholesale Investors Only)
The Fund is designed to provide Investors with exposure to a diversified portfolio of actively managed exposures to the Australian and New Zealand loan markets and ABS via an investment in the Underlying Fund. The Underlying Fund’s focus will be on Leveraged Loans, Commercial Real Estate loans and ABS.
The Fund (via its investment in the Underlying Fund) offers Investors access to markets that have been largely bank-dominated and provides an opportunity to generate stable, attractive and uncorrelated returns to diversify existing fixed-income portfolios.
The Underlying Fund aims to provide Investors with:
- direct exposure to Australian and New Zealand loans and ABS;
- a strong risk management culture with a focus on capital preservation and downside protection;
- exposure to a diversified and well-constructed portfolio;
- access to full portfolio economics, with all returns (base rate, margin, and any transaction fees generated) passed on to the Fund; and
- a floating rate portfolio designed to provide Investors with protection against inflation and rising interest rates.
The investment objective of the Fund is to invest in the Underlying Fund to gain exposure to a portfolio of Australian and New Zealand loans and ABS with the target of generating a return of the RBA Cash Rate plus 4% to 5% p.a. (net of fees and expenses).
The Fund’s primary investment strategy is to invest the majority of Fund Assets in the Underlying Fund. Details on the Underlying Fund investment strategy and process are detailed below.
Cash equivalents
This can include term deposits, commercial paper, treasury bills, short-term government bonds, marketable securities, and other money market holdings.
Investment Grade Securities
The Fund may invest in investment-grade bonds or loans. An investment grade rating is BBB- or higher (as defined by Standard and Poors).
Asset-Backed Securities (ABS)
The Fund may invest in ABS. Further details on ABS can be found on page 16. The ABS investments of the Fund are expected to be shorter term in nature than investments made by the Underlying Fund, as the Fund will need to make cash available for Capital Calls made by the Underlying Fund.
Underlying Fund investment strategy and process
As shown in the diagram below, the Underlying Fund’s focus is on Commercial Real Estate loans, Leveraged Loans and ABS.
Investment strategy
The Underlying Fund’s primary strategy is to proactively pursue Senior Secured Loans and ABS, focusing on relationships with lenders, equity sponsors, banks, specialty finance companies and other industry professionals.
The information provided below show the types of debt securities that may form part of the Fund’s portfolio of investments, together with some of their key attributes. It should be noted that all upfront fees received will be paid to the Fund for the benefit of Investors.
Transaction types
Commercial Real Estate loans
Commercial Real Estate Loans are loans to stabilised commercial (office, retail and industrial) properties and portfolios of properties. This lending is based on a combination of cash flows generated by the properties and the underlying value of the asset/s in question. For this type of lending the properties have long, stable tenant profiles (supporting cash flow generation) and are generally geared to less than 70% providing a material equity cushion.
Leveraged Loans
Leveraged Loans are typically debt that is provided to private equity firms to facilitate the acquisition of a target company. The typical Leveraged Buy Out capital structure is circa 50% debt and 50% equity.
Asset-Backed Securities (ABS)
Securitisation is the act of creating Asset-Backed Securities (ABS) from pools of underlying loans. It begins with the formation of a special purpose vehicle (SPV), which is a company whose specific purpose is to acquire assets and issue debt secured by those assets. ABS are the preferred way for smaller banks and specialty finance companies to finance pools of familiar asset types, such as auto loans, credit card receivables, mortgages, and business loans. Each underlying loan in a pool is a contractual obligation to pay. The figure below illustrates this.
The Fund will offer quarterly redemptions. Generally each of 31 March, 30 June, 30 September and 31 December will be a Redemption Date.
The amount available to fund redemption requests is subject to the liquidity of the Fund at the relevant Redemption Date.
Revolution recognises its duty to behave responsibly in its business activities by making sound investment decisions that are fully cognisant of a responsible investment approach to ESG principles. Revolution has established a contemporary ESG policy and became a signatory to the UN-supported Principles for Responsible Investment (PRI) on the 14th of June 2019.
As a professional investment manager, Revolution believes in being able to play its part in encouraging portfolio companies to adopt sound ESG practices and policies that lead to not only better performing investments (that deliver value to its Investors) but also align Investors in the Fund with the broader objectives of society.
A lack of focus on ESG principles may have the potential to have a direct substantial impact on an organisation’s ability to create or preserve economic value, as well as environmental and social value for itself, stakeholders and the wider community.
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*Please note, these parameters are set out as guidelines only and may be exceeded or not reached from time to time.
Revolution Asset Management Pty Ltd ACN 623 140 607 AFSL 507353 (Revolution) is authorised to provide financial product advice on and deal in financial products. Revolution has been appointed by Channel Investment Management Limited ACN 163 234 240 AFSL 439007 as the investment manager of the Revolution Private Debt Fund I, the Revolution Private Debt Fund II and the Revolution Wholesale Private Debt Fund II, unregistered managed investment schemes for wholesale investors.
The information provided on this website is of a general nature only and does not take into account any of your investment objectives, financial situation or needs.
Revolution is a boutique, Australian owned, private debt specialist investment manager. Revolution is wholly owned by its investment team and is centered on providing experienced portfolio management with the aim of achieving strong returns for Investors. Revolution believes its boutique structure creates a clear focus on investment outcomes.
Revolution is a dedicated team of experienced private debt managers, with an investment process proven across multiple market cycles that includes a significant investment in proprietary modeling, technologies and systems integrated within a fundamental credit platform. Revolution’s investment team has longstanding relationships with private equity sponsors, banks and specialty finance companies providing sourcing and origination channels that contribute to a differentiated opportunity set with limited competition.
The firm was established to provide investors with access to the Australian and New Zealand private debt markets. Revolution’s highly disciplined credit analysis is focused on capital preservation with significant due diligence and scenario analysis conducted prior to each individual investment.
Bob is co-founder and managing director of Revolution Asset Management. He is responsible for leading the strategy for the Australian and New Zealand private debt portfolio.
Prior to establishing Revolution Asset Management, Bob held senior roles as Head of Direct Lending at Kapstream Capital and Head of Fixed Income at Challenger Limited. As Head of Fixed Income at Challenger Limited, from 2005 to 2016, Bob led an investment team of 14 staff managing leveraged finance/private debt, real estate debt, Asset Backed Securities, investment grade corporate credit and alternatives portfolios on behalf of both Challenger Life Company and a number of Australian superannuation funds. During his tenure, funds under management increased from $1 billion to in excess of $9 billion. Prior to Challenger, Bob was Credit Analyst and Portfolio Manager at PIMCO, and Portfolio Manager, Infrastructure and Private Debt at AMP Capital.
Bob holds a Bachelor of Commerce in Accounting and Finance from the University of NSW, a Graduate Diploma in Applied Finance from FINSIA and a Master of Applied Finance from Macquarie University.
Simon is one of the co-founders of Revolution Asset Management. He is primarily focused on the Asset Backed Securities (ABS) portfolio involved in all facets of the investment process including origination, due diligence and on-going surveillance and monitoring of existing transactions. As a long term cornerstone senior and mezzanine investor in public and private ABS transactions, he is a very well-known figure in the Australian Securitisation market amongst issuers, arrangers and the sell-side.
From 2011 to 2017, Simon was a Senior Portfolio Manager for Westpac’s $2.2Bn AUD principal investment fund called Credit Relative Value. Simon specifically focused on RMBS, CLOs, Consumer, Equipment and Transport ABS. Previously, Simon was a Senior Portfolio Manager in Fixed Income at Challenger alongside Mr Sahota and has held Credit Trading and Structuring roles at CBA and ANZ. He is also currently on the Australian Securitisation Forum (ASF) Investor Subcommittee.
Simon is a member of the Investment Committee for Cancer Council NSW. Simon holds a Ph.D. in Applied Mathematics from the University of Melbourne, a Bachelor of Science with First Class Honours degree in Theoretical Physics from Monash University where he was the recipient of the Dean’s List Award for every year of attendance. He also received a Graduate Certificate in Applied Finance from FINSIA.
David is one of the co-founders of Revolution and is responsible for portfolio selection and management. He is primarily focused on corporate leveraged buyout (LBO) loans and real estate loans, including due diligence, execution and ongoing monitoring of existing transactions.
Prior to forming Revolution, David was a portfolio manager with Kapstream, where he was responsible for credit analysis and portfolio management, covering multiple sectors including property, infrastructure, diversifieds and technology, media and telecommunications. Prior to Kapstream, David worked alongside Bob Sahota at Challenger, where he was responsible for the credit research and management across multiple sectors with a key focus on commercial real estate debt and leveraged loans, which incorporated detailed industry and business analysis, financial analysis and significant downside modelling as well as assigning internal credit ratings.
David holds a Bachelor of Business (with Distinction) from the University of Technology, Sydney, is a member of Chartered Accountants Australia and New Zealand and is also a CFA charterholder.
Relevant Documents
You should read the PDS, TMD (if applicable) or any Investment Memorandum (or other offer documents) related to this product before making an investment decision. These documents (if available) can be found at https://revolutionam.com.au/, or if this is a "wholesale investor only" investment, can be viewed by contacting the Product Issuer identified on the aforementioned website.
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This offer of scheme interests is available to wholesale clients only. This product listing was vetted by and approved by the product issuer identified above before publishing. Investment Markets (Aust) Pty Ltd AFSL 527875 (IM) is not the issuer of the product.
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