Global Credit Strategy
Generation launched the Global Credit strategy1 in 2013. It seeks to identify, directly or via market counterparty relationships, lending opportunities to high quality businesses with strong management teams. The strategy's origination process allows both a close level of engagement with businesses and their senior management teams as well as detailed due diligence which are integral to our assessment of high quality lending opportunities. The process also shapes the delivery of optimal, sustainable capital structures commensurate with borrowers' long-term business plans.
Integration of Sustainability is relevant to Credit
Consistent with Generation's other strategies, the investment process of the Global Credit strategy fully integrates sustainability research with traditional investment analysis. We believe sustainability is a critical component in delivering stable, long-term returns in credit. In particular, we seek to identify material environmental, social and governance issues specific to a business and its industry sector. We believe that over time this approach will identify the highest quality borrowers and maximise our capital preservation.
The Global Credit strategy's mandate is global, with an emphasis on businesses based in Europe and North America. The strategy's lending focus is the provision of growth capital to small and medium sized privately owned enterprises with positive core operating cash flows, but it also extends to listed companies and asset based financings. Many of these companies are unable or unwilling to access the banking or wider capital markets but require working capital, capex or acquisition financing debt solutions for growth purposes.
Borrower Flexibility and Partnership
The Global Credit strategy's approach is relationship led in order to understand the needs of the business and the profile of its cash flows. The stable, closed-ended capital structure provides the time to tailor a financing package that is appropriate to the borrower's business plan. We are not loan product specific, and have the flexibility to consider different ways in which to achieve our desired returns, ranging from cash interest payment to equity warrants. Our partnership approach and committed capital means that lending is made with a view to being repaid at maturity but often includes sufficient flexibility such that the borrower is able to prepay the loan ahead of time based on certain conditions.
- The Global Credit strategy refers to a series of closed-ended investment structures based in Luxembourg and elsewhere which, when marketed, was available only to Professional Clients. No solicitation in respect of the strategy is made in any country and any origination or lending undertaken by it is only made in accordance with applicable law and regulation. Generation Investment Management LLP ("GIM LLP") is the investment manager for the strategy. GIM LLP does not itself originate loans and neither it, nor any investment structure managed by it, are authorised credit institutions.↩