Next Edge CIA Disciplined Growth Portfolio · TSX:PCD.UN
Next Edge CIA Disciplined Growth Portfolio — Next Edge Private Debt Fund — Investor Presentation (April 2019)
35 slides from Next Edge CIA Disciplined Growth Portfolio's investor presentation, April 2019
Slide 1: Next Edge Private Debt Fund
Next Edge Private Debt Fund April 2019 1
Slide 2: Important Notes
Important Notes The ‘Next Edge Private Debt Fund’or the ‘Fund’ means the ‘Next Edge Private Debt Fund’. Capitalized terms not defined in this presentation are defined as set forth in the Offering Memorandum of the Fund (the ‘OM’). This communication is not, and under no circumstances is to be constr
Slide 3: Cautionary Note Regarding Forward-Looking Statements
Cautionary Note Regarding Forward-Looking Statements The following presentation may contain forward-looking statements. All statements, other than statements of historical fact, that address activities, events or developments that Next Edge Capital Corp., the Credit Advisor or any affiliates thereof
Slide 4: Risks of Investing In The Fund
Risks of Investing In The Fund Please see the Fund’s OM for a complete listing and description of the risks associated with an investment in the Fund. Risks Associated With An Investment In The Partnership General Investment Risk; No Guaranteed Return; Limited Operating History; Class Risk; No Advic
Slide 5: Investors and Borrowers
We are an alternative investment fund manager providing leading-edge solutions for investors. For almost two decades our experienced team has launched numerous investment solutions in a variety of product structures. The people and approaches we discover may not be well known, but we believe they pr
Slide 6: Next Edge Capital Corp.
Next Edge Capital Corp. Formed in July 2006, was renamed Next Edge Capital Corp. after the spinout of Man Investments Canada Corp. from Man Group plc (“Man”) in June 2014. Licensed as an Exempt Market Dealer, Portfolio Manager and Investment Fund Manager. Management team responsible for raising over
Slide 7: Private Lending: The Opportunity
Private Lending: The Opportunity Private Lending: An Attractive Fixed Income Solution ●● Interest Rates are low, however many investors require higher yielding investments without assuming unnecessary risk. What is Private Lending? ●● Private Lending can be broadly defined as privately negotiated lo
Slide 8: Private Lending: The Opportunity
Private Lending: The Opportunity Post 2008, regulatory changes have forced traditional banks to notably pull back their lending activities. This has allowed new lenders to emerge and flourish in the alternative lending space. The Private Lending market is estimated to be in excess of US $45.22 trill
Slide 9: Private Lending: The Opportunity
Private Lending: The Opportunity Breakdown of Investors in Private Lending by Type Private Lending has been broadly adopted by institutional investors. Source: Preqin Private Debt Online 2018 9
Slide 10: Largest Investors in Private Debt
Largest Investors in Private Debt “ Private debt should be a part of every pension plan’s portfolio. - Teresa Troy, chief executive of Halifax-based HRM Pension Plan * ” “ Alternative Credit should play a pivotal role in client portfolios, but instead tends to be underexploited, both in terms of ass
Slide 11: Private Lending: The Opportunity
Private Lending: The Opportunity Non-bank and alternative lending in North America is: ●● Highly fragmented - many small players. ●● $1-15 Million market opportunity is where the return arbitrage opportunity is available. ●● A place where the customers’ interests are not well-represented; customer s
Slide 12: Next Edge Private Debt Fund
Next Edge Private Debt Fund ●● To achieve its investment objective the Fund will allocate capital to a limited number of specialist credit advisors and managers of credit pools to primarily take advantage of profitable opportunities in Investment the private lending market. Objective ●● The Fund aim
Slide 13: Our Process
Our Process 1 Origination. 2 Underwriting. 3 Monitoring. 4 An effective source of capital. 5 For a fund, pacing of cash flows/effective cash management as well. 13
Slide 14: Focus Areas of Private Lending
Next Edge Private Debt Fund is focused on these areas of Private Lending: Factoring ●● Accounts receivable financing, commonly referred to as factoring, is an essential component of trade finance and has existed in developed economies for centuries. ●● Simply stated, factoring allows a company to im
Slide 15: Primary Credit Advisor: Liquid Capital Corp.
Next Edge Private Debt Fund primary Credit Advisor is: ●● Liquid Capital Corp. (‘Liquid Capital’) have been operating in the factoring and trade finance space since 1999 processing over $3 billion in transactions through both its Canadian headquarters in Toronto and US headquarters in Dallas. ●● The
Slide 16: Liquid Capital / Next Edge Capital Initial Credit Decision
Liquid Capital / Next Edge Capital Initial Credit Decision Two layers of scrutiny, Liquid Capital and Next Edge credit personnel: Deals first screened by Liquid Capital. High points of analysis include: ●● Credit checks for both the client company and its owners. ●● UCC/PPSA searches and perfected s
Slide 17: Liquid Capital Initial Credit Decision Document Checklist
Liquid Capital Initial Credit Decision Document Checklist General Documents Factoring ABL Signed Client Application X X Corporate Financial Statements X X Detailed Accounts Receivable Aging X X Detailed Accounts Payable Aging X X Inventory Valuation Report X Additional Collateral Valuation Reports(e
Slide 18: Ongoing Monitoring
Ongoing Monitoring Daily monitoring by Liquid Capital using Cadence / FactorSoft administrative system ●● Best in class industry standard software. ●● High degree of transparency. ●● Robust audit trail mitigates fraud risk. ●● Drilldowns by (these are examples – FactorSoft offers extremely granular
Slide 19: Historical Performance
Historical Performance Class A11 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC YTD2 2019 0.69% 0.59% 0.77% 0.66% -- -- -- -- -- -- -- -- 2.74%* 2018 0.68% 0.55% 0.66% 0.62% 0.64% 0.79% 0.67% 0.63% 0.63% 0.59% 0.64% 0.65% 8.06% 2017 0.66% 0.60% 0.57% 0.63% 0.61% 0.53% 0.57% 0.57% 0.60% 0.69% 0.54%
Slide 20: Summary
Summary Private Loans not Market Priced Strong Deal (Minimal Volatility) Origination Attractive Risk/ Relationships Reward Ratio Across North America The Next Edge Low historical Private Debt Strong and Correlation to Experienced Equity and Bond Fund Management Markets Team Low Interest Focus on Cap
Slide 21: Summary of Terms
Summary of Terms Class A NEC 448 FundSERV Codes Class F1 NEC 442 Min. Initial $10,000; for Accredited Investment Investors only Min. Subsequent $5,000; for Accredited Investment Investors only Effective Class A 1.50% Management Fee Class F1 0.50% (Includes Servicing Fee) Performance Fee 20% above 6%
Slide 22: Appendix
Appendix 22
Slide 23: Liquid Capital – Organizational Chart
Liquid Capital – Organizational Chart 23
Slide 24: Experienced Credit Team
Experienced Credit Team Key members of Liquid Capital/Line Financial Investment Committee Team Erica Axani, Chief Risk Officer Ms. Axani is the Chief Risk Officer for Next Edge Capital Corp. (“Next Edge”) and helps to manage all credit, risk, and underwriting within Next Edge’s private lending platf
Slide 25: Experienced Credit Team
Experienced Credit Team Key members of Liquid Capital/Line Financial Investment Committee Team Rick Coles, VP and General Counsel Rick likes the challenge of the evolving, multifaceted role he fills at Liquid Capital. As General Counsel, he advises the company on any and all legal matters (projects,
Slide 26: Experienced Credit Team
Experienced Credit Team Key members of Liquid Capital/Line Financial Investment Committee Team Sol Roter, Founder and CEO Sol Roter is the current CEO of Liquid Capital, responsible for key decisions related to underwriting, credit, growing the principal network and overall strategy. More than that,
Slide 27: Next Edge Capital Organizational Chart
Next Edge Capital Organizational Chart Robert Anton David Scobie, COO Toreigh Stuart, CEO Managing Director Compliance, Trading, Operations Sales & Product Development Cheng Dang Erica Axani Richard Goode Executive Vice President, Chief Risk Officer Executive Vice President, Sales Finance Nicholas T
Slide 28: Next Edge Commercial Finance Organizational Chart
Next Edge Commercial Finance (“NECF”) Organizational Chart NECF USA NECF CANADA Vince Mancuso John Levac Managing Partner, US Managing Partner, Canada John Center Kevin Temke Senior VP, Senior VP, Portfolio Development Originations Eric Stickney Associate, Portfolio Development 28
Slide 29: Experienced Credit Team
Experienced Credit Team Key members of Next Edge Capital/Next Edge Commercial Finance Investment Committee Erica Axani, Chief Risk Officer Ms. Axani is the Chief Risk Officer for Next Edge Capital Corp. (“Next Edge”) and helps to manage all credit, risk, and underwriting within Next Edge’s private l
Slide 30: Experienced Credit Team
Experienced Credit Team Key members of Next Edge Capital/Next Edge Commercial Finance Investment Committee Jamie Franz Jamie Franz has over 30 years of experience in senior management, investment management, sales management and loan origination for both commercial and consumer banking, asset-based
Slide 31: Experienced Credit Team
Experienced Credit Team Key members of Next Edge Capital/Next Edge Commercial Finance Investment Committee Vince Mancuso Vince Mancuso is one of the the founders of Next Edge Commercial Finance and leads our overall U.S. portfolio development strategy, focusing on improving asset growth, client rete
Slide 32: Experienced Credit Team
Experienced Credit Team Key members of Next Edge Capital/Next Edge Commercial Finance Investment Committee David Weinstein David Weinstein serves as a Senior Credit Officer at Next Edge and acts as an advisor to the Liquid Capital Investment Committee. David assists in overseeing the credit and oper
Slide 33: What is Factoring
What is Factoring ●● Factoring is the purchase of an invoice at a discount. ●● Factor confirms that invoice is valid and collectible. ●● Clients sell invoices to the factor. ●● The factor “purchases” the invoice; provides cash to the business who sold the invoice; the customer pays factor the value
Slide 34: The Liquid Capital Factoring Process
The Liquid Capital Factoring Process 34
Slide 35: For more information please contact
For more information please contact: Next Edge Capital Corp. 1 Toronto Street, Suite 200 Toronto, ON M5C 2V6 Local – 416.775.3600 Toll Free – 877.860.1080 info@nextedgecapital.com www.nextedgecapital.com 35
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