In March, the Opportunistic Credit Fund expanded its asset-backed securities (ABS) holdings with the purchase of an additional $3.9M of securities.
The Opportunistic Credit Fund purchased an additional $3.9M in asset-backed securities in March, bringing the total portfolio cost-basis to approximately $19.7M in invested principal as of March 31, 2023. (Note: this figure is invested principal and does not include any mark-ups or write-downs as a result of market changes). The Fund began purchasing single-family rental ABS in February. We believe this period of exceptionally attractive pricing is temporary and most acute in primary auctions. As before, we’ve focused on ABS pools issued by the most creditworthy borrowers and where the collateral (i.e., the portfolio rental homes) consists of high-quality homes in strong locations that we might otherwise be buyers and owners of in our other funds over the long-term.
See the table below for a detailed breakdown of the fund’s ABS holdings as of March 31, 2023.
For more information about our private credit investment strategy, please click here.
1 The gross yield solely represents a fixed rate of return due to the Opportunistic Credit Fund under the terms of the investment agreement(s), and does not reflect either a gross or net return that an investor in the Opportunistic Credit Fund may expect to receive as a result of this fixed rate return. Due to the uncertainty of other factors that will ultimately determine the return to any investor (such as leverage, cash drag, and other potential financings), the performance of this asset to the investor is currently unknowable and undeterminable, and may ultimately be lower or higher than the stated fixed rate of return. However, please note that all investors in the Opportunistic Credit Fund will be subject to a 1.75% fund management fee, and, if the Opportunistic Credit Fund is able to achieve a greater than 10% overall return on its portfolio, which is also uncertain and undeterminable at this time, then the asset will also be subject to an additional 20% performance-based fee for those Opportunistic Credit Fund investors.
2 The target net yield of 9.5 -10.9% is intended to represent a range of return we believe is achievable given current market conditions. The target net yield consists of the 8.2% gross yield, assuming roughly 75% leverage at an interest rate of 6.75 - 7.25% and is adjusted net of fees disclosed above. Note that the amount and cost of leverage can vary over time, and there can be no guarantees that the fund is able to achieve the stated target net yield.
