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| Arif N. Bhalwani of Third Eye Capital Management, a manager of privately-negotiated senior secured loans at the marcus evans European Pensions & Investments Summit 2015, discusses the types of companies in the Canadian mid-market that pension funds should focus on. |
LONDON, May 22, 2015 - (ACN Newswire) - "Many promising companies lack access to financing," according to Arif N. Bhalwani, Managing Director, Third Eye Capital Management. "Banks and other conventional lenders typically focus on a company's history and earnings track record, but that is not always a reliable indicator of its future. We look at a lot of pro forma information and consider the company's prospects and potential," he explains.
Third Eye Capital Management is a private debt manager at the marcus evans European Pensions & Investments Summit 2015, in Montreux, Switzerland, 8 - 10 June.
- Tell us about your investment approach and what you look for in companies.
We provide promising companies, whether established or early stage, opportunities to access financing that they might otherwise not be able to achieve. That could be due to complexity in the business, the effects of seasonality or industry cyclicality, or issues with the visibility of their earnings.
We look at the hidden assets of the underlying business, and make loans to companies we think will be successful long-term. By seeing more, we can combine capital with our operational skills and experience to help drive value. We are industry agnostic and pursue mid-market lending opportunities primarily in Canada.
- How would traditional lenders approach some of these companies? Why would they not provide capital but you would?
Typically, traditional lenders use a mechanical process that is backwards-looking. They look at the company's history, earnings track record and tangible assets. We prefer to focus on the future and try to uncover the assets that are invisible on the balance sheet. For instance, what contracts are they in the process of negotiating? Where are they taking their product or service strategy? What are the market trends? What is their competitive advantage?
More and more companies today are driven by their intellectual property. That may include their brands or the patents they hold, maybe distinct access to a market or distribution strategy, how they cultivate themselves in the minds of their customers, or the employee culture. All of these are invisible assets that add value.
- How would these assets compare with other assets pension funds hold?
Privately-negotiated loans are, by their nature, unique assets that cannot be found anywhere else in a pension fund's portfolio. They can generate yields at a substantial premium to what investors would get in the publicly traded markets. This premium is derived in part from the illiquid nature of the asset but its size is dependent on a manager's skill. Our ability to manage complexity and drive value through our team's operational experience has ensured investors get measurable alpha above the illiquidity premium.
The other benefit is mark-to-market issues. We do not have the same considerations that you would see in a publicly-traded portfolio, where market gyrations and changes in investor sentiment can affect the value of an investment even when nothing has changed with the underlying borrower.
We are not watching Bloomberg all day and do not really worry about what is happening in the broader capital markets. We care about what our portfolio company needs to be more successful and how we can add value. For us, it is about discrete company analysis, old fashioned fundamentals, and future prospects. We invest with high conviction so that we can support a company as it sails through market storms when they come.
About the European Pensions & Investments Summit 2015
The 15th annual European Pensions & Investments Summit is the ultimate meeting point, bringing elite buyers and sellers together. The Summit offers regional pension investors and international fund managers and consultants an intimate environment for focused discussion of the key new drivers shaping institutional asset allocations. Taking place at the Fairmont Le Montreux Palace, Montreux, Switzerland, 8 - 10 June 2015, the Summit includes presentations on capturing attractively valued investments, increasing fund resilience, tail risk management and making responsible investing a reality.
For more information please send an email to press@marcusevanscy.com or visit the event website at www.epi-summit.com/ArifNBhalwaniInterview
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Please note that the Summit is a closed business event and the number of participants strictly limited.
About Third Eye Capital Management
Third Eye Capital Management ("TEC") is Canada's leading alternative credit manager with approximately $500 Million in assets. Since 2005, TEC or its affiliates have been succesfully helping good companies that are overlooked or underappreciated by traditional financing sources to reach their goals. TEC takes a broader perspective to identify a company's potential and fulfils a critical need in the Canadian middle-market. www.thirdeyecapital.com.
Contact:
Sarin Kouyoumdjian-Gurunlian
Press Manager, marcus evans, Summits Division
Tel: +357 22 849 313
Email: press@marcusevanscy.com
Topic: Trade Show or Conference
Source: marcus evans Summits
Sectors: Daily News
http://www.acnnewswire.com
From the Asia Corporate News Network
Copyright © 2024 ACN Newswire. All rights reserved. A division of Asia Corporate News Network.
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