Overview
Ver Capital operates via a closed-ended funds platform, mainly investing in European leveraged and corporate loans and via open-ended funds platform with daily NAV, mainly investing in European high yield corporate bonds
Ver Capital, a trading counterparty of all the main investment banks, has been investing in the European corporate loan and bond market for the last 10 years and, is able to apply European best practices (credit analysis, structuring, security package, contractual features) in its asset management activities for both open ended and closed ended funds.
The analysis of the assets in which Ver Capital invest follows a rigorous structured process based on macro and fundamental analysis, validated by a rating agency and by due diligence carried-out by independent advisers.
Fundamental analysis is carried–out through a dynamic approach always based on strong diversification and, for open-ended funds, by an active management of yield to maturity and volatility of single assets too . The constant portfolio monitoring allows the adjustment of the asset allocation in order to maintain a fair balance between risk and reward. For this purpose, relative-value analysis are continuously done both on a single name basis and by sector, rating and maturity class.
European High Yield
High yield bonds are debt securities issued by companies with a rating below triple B. Such sector (and especially the B-BB segment) represents in Europe the rating class of the vast majority of industrial companies. The steady growth of this market in the last years is mainly attributable to the progressive use of capital markets as a way to finance companies and, considering the disintermediation process arose from the implementation of Basel 3, it is reasonable to say that this sector will continue to grow significantly during the next years.
The considerable growth of the European high yield market (ex-financial, namely excluding securities issued by financial institutions) during the last years, allowed this market to be considered as an asset class in its own right, now included in the portfolio of the main institutional investors.
- Ver Capital Credit Fund
- Ver Capital Cedola
- Ver Capital High Yield Italian Selection
- Ver Capital Short Term
European Leveraged Loan
Corporate loans are often referred to as leveraged loans when initially associated with leveraged buy-out operations. They are floating rate instruments with a reward given by Euribor plus a spread which is the expression of the credit risk of the issuer.
Senior secured loans, English Law, LMA (Loan Market Association), are considered the safer assets within the sector and are typically characterized by:
- High degree of information rights (at the outset: information memorandum, business/fiscal/legal/financial due diligence; overtime: monthly and/or quarterly reports, and most importantly, forward looking information, including business plans);
- High contractual protection and control rights (contractual covenants checked on a quarterly basis);
- Security package. The Collateral typically includes tangible and intangible assets of the borrower and share pledge;
- Voting rights aimed to protect minorities .
The loan secondary market has grown and is more and more structured, with indexes, dedicated platforms (i.e. Markit) and daily quotations from all the main investment banks.
Funds managed by Ver Capital mainly investing in European corporate loans:
- Ver Capital Credit Partners VIII
- Ver Capital Credit Partners VI
- Ver Capital Credit Partners IV
- Ver Capital Credit Opportunity Fund
Private Debt
Along with European high yield and European corporate loans, Ver Capital is active from 2006 in the Italian private debt market.
The development of the Italian private debt market has reached new highs in recent times, both in terms of size and in terms of innovation of the instruments. Recent evolutions of the regulation have simplified the bond issuance procedures for non-listed SMEs, aligning the financing opportunities of the Italian companies to those of the more advanced European industrial and financial systems.
Funds managed by Ver Capital mainly investing in local private debt:
- Ver Capital Credit Partners Italia V
- Ver Capital Credit Partners SMEs VII
SPECIAL SIT
Ver Capital, alongside its traditional strategies, has flanked a new line of business that can assist companies in slight difficulty to recover their initial potential value. The main focus of the Fund is on corporates:
- with excessive debt, liquidity constraints, shareholding issues but with good potentials and recovery perspectives
- with light operation and business restructuring needs
- out-of-court insolvency procedures such as recovery plans, restructuring agreements and negotiated compositions of the new Italian “Codice della Crisi d’Impresa e dell’Insolvenza” (CCII)
- management or shareholding issues
A successful turn-around could be based on both industrial and financial levers. Between these two, the Fund’s major effort will be dedicated to increase the Enterprise Value of target companies leveraging on their industrial potential.
On this basis the Fund’s investment approach will be focused on:
- Financial restructuring
- Ebitda margin expansion (or margin recovery).
- Revenue growth (or revenue recovery) and
- Multiple arbitrage.
- Multiple arbitrage/enhancemen will be a potential important contributor of total value creation but as a by product of the first three levers.
TRANSITION ENERGY
Ver Capital SGR launch a platform for energy transition, setting up a strategic partnership between Sinloc SpA and Ver
Capital Sgr leveraging distinctive competences, significant and synergic track records. The Transition Energy Fund had its first close on July 2022.
The investment Strategy focus on energy efficiency, renewable energy, public network projects and sustainable mobility. All the investment will be made through majority equity investments in dedicated SPV. Investment strategy is developed in line with Sustainable Development Goals (SDG) policies, based on ESG criteria and compliant with ex art. 9 SFDR. In fact, the Fund is classified under Art 9 of the Regulation (UE) 2019/2088 SFDR with a clear impact investment strategy and targeting sustainable investments.
The Fund sets impact objectives at the documentation level:
Ex ante:
- 9.000 TOE/year of savings in non renewable primary energy
- 15.000 tCO2/year of greenhouse emissions avoided
- Specific eligibility criteria for each project sub sector
On going:
- Monitoring on continuing basis of impact KPIs for each single investment
- Monitoring achievement of goals defined ex ante
- Periodic reporting
Ex post:
- Report of goals achieved and achievable at least on annual basis
- Monitoring of any underperforming
- Evidence of the additional generated impacts