BAI webinar „US Private Credit“ – regulatory update › fileadmin › PDFs › DE › Events...

BAI webinar „US Private Credit“ – regulatory updateFrank Dornseifer, Managing Director BAI e.V.

January 30, 2019

Agenda / Introduction BAI

• Intro: www.bvai.de

• Overview: Investing into US Private Debt

• Fund Regulation (AIFMD)

• Investment Taxation (InvStG)

• Investor regulation (Solvency II and AnlV)

• Annex

2

Frank DornseiferGeschäftsführer / Managing DirectorRechtsanwalt/attorney-at-law

Poppelsdorfer Allee 10653115 Bonn+49 (0) 228 [email protected]

Investment & Regulation

AdvocacyAssociation

Events Science/ Public Affairs

http://www.bvai.de/

mailto:[email protected]

How to access US Private Debt?

• German AIFs (subject to KAGB/AIFMD) • Closed-ended Spezial-AIF pursuant to § 285 KAGB

• Open-ended Spezial-AIF pursuant to § 282 or § 284 KAGB (Fund of funds, Master fund)

• EU-AIFs (e.g. Luxembourg AIFs marketed to German investors)• Master fund

• Fund of funds

• US Private Debt (Funds) • Funds subject to specific investor and tax requirements

• Other means, e.g. ELTIFs (may be marketed even to retail investors), securitisations, notes, etc.

3

Fund Regulation – KAGB/AIFMD

4

Fund vehicles subject to the KAGB Activity („what?“) How?

Closed-ended Special AIF(§ 285 sect. 2 KAGB) – LP model

- Direct lending (loanorigination)

- Investing into debt funds- Purchase of loans including

restructuring/prolongation

- Direct exposure- Leverage < 30 %- 20% per borrower- Appropriate organizational

structure and processorganization (KAMaRisk)

Opend-ended Special AIFs (§ 282 sect. 2 sentence 3 KAGB) with fixedinvestment guidelines (284 sect. 5 KAGB) – mutual fund model

- Purchase of loans (loanparticipation)

- Shareholder loans- Investing into debt funds,

but restrictions- Restructuring/ Prolongation

- indirect exposure

EU-AIFM, EU-AIF if marketing in Germany allowed (exemption: § 330KAGB)

- Direct lending- Restructuring/ Prolongation

No application of KAGB and KAMaRisk to EU-AIFMs; AIFMD Delegated Regulation for Risk and Liquidity Management

Fund Regulation – specific requirements pursuant to KAMaRisk

5

Requirements for Direct Lending Sensitive Aspects

• Particular requirements for direct lending andinvestments in unsecured loans as they exist in the MaRisk for credit institutions

• No base in regulation (EU) 2015/35!• Organizational structure and process organization

• Decision on lending/investment• Processing of loans• Control of the processing of loans• Processing of problematic loans• Valuation of securities• Early detection of risks

• Proportionality

• Linked with MaRisk for credit institutions (same business, same rules?)

• Treatment of different business models and assetclasses

• Direct lending vs. purchase of loans• Bonded loans• Senior secured / unsecured loans• Syndicated loans• Infrastructure debt

• Use of ratings, credit decisions or valuation of securities of credit institutions

• Application also for EU-AIF(M)s

Circular 1/2017 (WA) from 10 January 2017 – KAMaRisk in forceSection 5: Particular requirements for direct lending and investments in unsecuredloans

Investment Taxation

• Isolated definition of and distinction between (only for taxation purposes) • Mutual investment funds: subject to a “non-transparent” taxation system that provides for a separate

taxation of funds and investors similar to taxation of corporations. With the exception of special investment funds, non-UCITS partnerships and funds subject to special legislation, this system initially applies to all investment vehicles irrespective of their legal structure or investor base.

• Special investment funds: The semi-transparent taxation system that applies for all investment funds until 2017 will be retained for special investment funds under certain conditions.

• (Non-UCITS-) Partnerships: subject to the general German provisions on taxation, which provide for transparent taxation at investor level.

• Funds subject to specific legislation: Some funds such as equity investment companies, capital investment companies, REIT stock corporations and REIT corporations within the meaning of the German REIT Act, are subject to specific tax legislation that differs from the treatment applied to the above funds.

6

InvStRefG: The case for open-ended Special Investment Funds

Mandatory Investment Guidelines („Anlagebestimmungen“) pursuant to § 26 nos. 1-10 InvStG, i.a. • Redemption right (not exchange-traded) (no. 2) <= Debt funds usually are closed-ended!

• Eligible assets (min. 90%) (no. 4)• Securities pursuant to § 193 KAGB and other investment instruments pursuant to § 198 KAGB (no economic meaning of „securities“, no

indirect purchase of securitization entities), closed-ended fund as security

• Equities, money market instruments, derivatives, bank deposits; real estate (companies) pursuant to the KAGB, etc.

• German and foreign UCITS, German and foreign investment funds fulfilling the requirements of nos. 1-7

• Special Investment Funds units

• PPP Companies

• Precious Metals

• Unsecured loans

7cumulative, if not: (non-transparent) Investment Fund

Investor Regulation: Solvency II and SCR Calculation

8

VerbriefungLook-through

BorrowerFund

InvestorLoan Bond Fund Share

Bond / ABSSecuritization

Solvency II Stress Factors

Rating CorporateBonds/ Loans

CommercialReal Estate

Covered Bonds

Qualified Infrastructure

ABS Typ 1

ABS Typ 2

EquityTyp 12

Equity Typ 23

1 yr 1yr 1yr 1yr 1yr 1yr

AAA 0.9% 0.9%[/2]1 0.7% 0.64% 2.1 % 12.5%

39% 49%

AA 1.1% 1.1%[/2] 1 0.9% 0,78% 3.0% 13.4%

A 1.4% 1.4%[/2] 1 1.4% 1.00% 3.0% 16.6%

BBB 2.5% 2.5%[/2] 1 2.5% 1.67% 3.0% 19.7%

Unrated 3.0% 3.0%[/2] 1 Wie CRE 100.0% (?) 100.0% 100.0%

1) Reduction of 50% if risk-adjusted value of the qualified security > value of the loan2) Listed equity from EEA or OECD, AIFs without leverage3) Listed equity from Non-EEA or Non-OECD-Countries, non-listed equity, other capital investments

Source: JonesDay

Investor Regulation: Solvency II and unrated debt

• 26 April 2017: Consultation (EIOPA-CP-17-003 Call for Evidence - Request by the European Commission to ΕΙΟΡΑ for Technical Advice on the treatment of unlisted equity and debt without an ECAI rating in the standard formula)

• Recital 150 of the Solvency II Regulation: Review of the Solvency II standard formula until the end of 2018

• Implementing Solvency regulation due mid of February• According to the latest draft (Art. 176a et seq) it would be possible to assign a spread risk charge

based on the CQS 2 or 3 to certain unrated loans without a recognized collateral. The qualification criteria are comprised of requirements for (i) the issuer, (ii) the instrument and (iii) the internal rating process of the investor. One of the key requirements is the maximum yield requirement where the yield of the target asset is not allowed to exceed certain thresholds derived from public bond indices.

• The draft also provides for a model based on a third party approved internal model of a Basel or Solvency II regulated co-investor.

9

10

Investor Regulation: Investment Ordinance (AnlV) for Pension Funds, etc.Direct investments Indirect Investments via investment funds and other structuresFrom the balance sheet Open-ended Special AIF with

fixed investment guidelinespursuant to § 284 KAGB

Closed-ended EU Special Funds / closed-ended Special AIFs

Closed-ended EU Special Funds / Closed-endedSpecial AIFs

Structured Bonds ParticificationCertificates

Numbers of § 2 sect. 1 of the InvestmentOrdinance

No. 4cCorporate loans (includinginfrastructure debt):• Loans to new corporates with

no investment grade• Loans to infrastructure portfolio

companiesLoans from companies domiciled in the EEA/OECDNo credit institution/no bank

„Speculativ grade“

lex specialis

No. 16Opend-ended loand funds

Special AIFs pursuant to § 284 KAGB and not subject to no. 14c

Redemption right once a yearfor fungibility reasons

Eligible Assets pursuant to §284 KAGBOnly up to 30% loans/unsecured loans

Only shareholder loans, nodirect lending to otherborrowers

Restructuring and prolongation of unsecuredloans is possible

No. 13b„Private Equity Funds“, („active“) PE-like investmentstrategy

If not PE-like, no. 17 isapplicable

Closed-ended loan funds

“other instruments to financecompanies”

Direct lending and restructuring

Secondary purchase of loans

EuVECAs, EuSEFs, ELTIFs EU-AIFs

No. 17“Other AIFs”

Applicable, if not nos. 13b, 14c, 15 and 16 apply

If not PE-like strategy(i.e. „passive“), no. 17 is applicable and not no. 13b

Closed-ended loanfunds

EuVECAs, EuSEFs, ELTIFs, EU-AIFs

No. 10aABS and ABS-like Structures(if „asset linked“)

§ 284 KAGB: Eligible in form of securities?

No. 9

Annex: Asynchronism of regulation(s) (1)

11

§ 285 KAGB – closed-endedSpecial AIF

Investment Fund pursuant to the InvStG

§ 2 sect. 1 No. 13b Investment Ordinance/ Circular

§ 2 sect. 1 no. 17 Investment Ordinance / Circular

Definition of § 1 sect. 5 KAGB (no „redemption right“)

§ 1 sect. 2 InvStG and § 1 sect. 1 KAGB (open-ended and closed-ended funds, ifnot subject to § 26)

Closed-ended AIFs Investmente funds pursuant to § 1 sect. 1 KAGB (open-ended or closed-ended)

• Investment in instruments withvaluable current market price

• Limitation for leverage of 30% of the capital

• Limit of 50% for partner‘s loans

• InvStG does not apply if fund islimited partership (LP is taxtransparent)

• No prescriptions with regard to eligible assets

• Eligible Assets pursuant to § 261 sect. 1 no. 4 KAGB, equity orequity-like capital and otherinstruments to finance companies

• Licence under KAGB/AIFM „light“ and AIFM with domicile in the EEA or OECD

• Short-term leverage up to 10% (Nr. 13b, cf. Circular)

• No prescriptions with regard to eligible assets

but• No opend-ended real estate funds

for retail investors• Not subject to § 2 sect. 1 nos. 13b,

14c, 15 and 16• KAGB licence and AIFM with

domicile in the EEA

Maximal exposure to single borrowerup to 20%

Issuer limit of 1% of the restrictedassets

Issuer limit of 1% of the restrictedassets if closed-ended AIF

Local business tax for direct lendingactivities?

Annex: Asynchronism of regulation(s) (2)

12

§ 284 KAGB – Special AIFs with fixedinvestment guidelines

§ 26 InvStG: minimum of 90% of the NAV invested in following assets:

§ 2 sect. 1 no. 16 Investment Ordinance(with reference to § 284 KAGB)

Redemption right before liquidation (open-ended) Redemption right once a year Redemption right once a year pursuant to the draft of the Circular to the Investment Ordinance

Securities Securities pursuant to § 193 KAGB and otherinstruments pursuant to § 198 KAGB

Money Market Instruments, Derivates, Bank Deposits, Real Estate, Real Estate Companies

Money Market Instruments, Derivates, Bank Deposits, Real Estate, Real Estate Companies, instrumentspursuant to § 231 KAGB

Target AIFs:• Opend-ended German, • EU and • Third country investment funds

Target-AIF:• German and foreign UCITS, • German and foreign funds fulfilling the

requirements of § 26 no. 1-7• Special Investment Funds

• Special AIFs fulfilling the requirements of § 284 KAGB and not being subject to no. 14c

• Similar EU investment funds• AIFM from the EEA• Licence pursuant to § 20 KAGB or similar

supervision

PPP Companies, Precious Metals, unsecured loans PPP Companies, Precious Metals, unsecured loans Limit of 30% for unsecured loans? (cf. Draft of the Circular to the Investment Ordinance)

Issuer limit of 10%

w w w. c e p r e s . c o m

Private Debt in the environment of the most important markets - USA and Europe

“Generating investment returns in a maturing Private Debt asset class?”

BAI Private Debt WebinarJanuary 2019

Marc Dellmann Head of Business

Development

http://www.cepres.com/


Copyright © 2019 CEPRES. All rights reserved. Confidential.

By investment experts, for investment experts

CEPRES – Data, Analytics, Investment Network

Source: CEPRES PE.Analyzer, as of 21/01/2019.

$23.9Trillion Asset Value

6,400Funds in Due Diligence

65,900Companies Analyzed

1,850LP and GP Counterparties

6,175 3,236

525

9,936 Private Loans

Northern America Europe Others

• 709 Private Debt Funds

• $3.4 trillion of Enterprise Value

• $225 billion of gross Invested Capital

• 643 direct Lending Co-investments

Deepest Private Debt Market Intelligence:

2



1. Key Facts & Figures - Performance Observations

2. Market Developments and Trends

3. Digging Deeper - Debt Pricing Analysis

4. Snapshot: US Lower MM and US Infrastructure

5. Conclusion

Agenda

3



Gross IRR returns by key segments across investment years 1998-2017, US vs. EU

Attractive Gross IRRs across Private Debt asset class

Source: CEPRES PE.Analyzer, as of 12/12/2018. Lower Mid-Market defined as companies with Entry EBITDA of USD / EUR 50 million or less.

1. Robust across all segments, Lower Mid-Market and Mezzanine show highest returns

2. US outperforms EU on average by ~300-400bps

3. Pooled returns confirm US superior in capital allocation i.e. GP deal investment decisions

13,16%

17,15%18,59%

17,64% 17,55%

9,19%

12,70% 12,27% 12,64% 13,21%14,30%

18,24%

14,43%16,06%

17,18%

9,32%

13,72% 14,04%13,20% 12,75%

0,00%

5,00%

10,00%

15,00%

20,00%

Senior Mezzanine Unitranche Overall Lower Mid-Market

Private Debt Gross IRR Comparison

US Pooled IRR EU Pooled IRR US Median IRR EU Median IRR

4



Private Debt Fund Net IRR & Net TVPI comparison by investment era

Returns vs cash velocity - attractive net cash multiples?

Source: CEPRES PE.Analyzer, as of 10/12/2018.

4,35%

7,18%6,24%

8,98% 9,58%10,72%

13,44% 14,09%

16,10%

0%

5%

10%

15%

20%

2004-2008 2009-2013 2014-2017

Fund Net IRR

Lower Quartile Median Upper Quartile

1,14 1,141,04

1,341,24

1,13

1,63

1,411,25

0,00

0,50

1,00

1,50

2,00

2004-2008 2009-2013 2014-2017

Fund Net TVPI

Lower Quartile Median Upper Quartile

Increasing Net IRR returns in recent years with higher dispersion

Declining Net TVPI returns yet with much tighter spreads

Strong market liquidity & capital efficiency, shorter duration / recycling of cash

1 2

5

1

2







5. Conclusion

Agenda

6



Private Debt Gross Invested Capital in US & EU

1. Senior Debt increasingly dominating post-GFC

0%

20%

40%

60%

80%

100%

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

US Private Debt Invested Capital

Senior Mezzanine

0%

20%

40%

60%

80%

100%

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

EU Private Debt Invested Capital

Senior MezzanineSource: CEPRES PE.Analyzer, as of 10/12/2018.

7



Private Debt Pricing in US & EU

2. US Senior significantly richer, Mezz tightening

12,50% 12,00%12,54% 12,58%

13,25% 13,50% 13,50% 14,00%13,00% 13,50% 13,00%

14,00% 14,00%13,00% 13,00% 12,50% 12,00%

10,46% 10,62%12,00%

10,50%

14,00%

11,25%

14,00%

11,84%

10,50% 10,13% 9,76%

11,16% 10,95%

9,50% 9,60% 10,00% 10,00%

8,50%7,00%

9,00%

11,00%

13,00%

15,00%

17,00%

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

US Private Debt Total Interest (Current + PIK)

Mezzanine (Median) Senior (Median)

8,50% 8,50%7,50%

8,75%

11,05%12,38%

11,26% 12,05% 11,84% 12,32% 12,65% 13,38%

10,60%8,78%

10,75% 10,64% 11,48%10,24% 9,97% 10,25%

8,50%

5,70% 6,37%5,26% 5,35% 4,98% 4,86%

6,41% 6,63%

0,00%

5,00%

10,00%

15,00%

20,00%

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

EU Private Debt Total Interest (Current + PIK)

Mezzanine (Median) Senior (Median)

Source: CEPRES PE.Analyzer, as of 23/01/2019

8



Private Debt Deal Financing Structures, 1997 - 2017

3. Leverage high but below peaks, supported by equity

Source: CEPRES PE.Analyzer, as of 10/01/2019. Worldwide Private Debt Deals – Deals from 1997 to 2017

From 2002 to 2008 (GFC): substantial Leverage Multiples increase from 3.8x to 4.8x

3.1x Post GFC 2009, less liquidity and more scrutiny resulted in a bottom 3.1x Leverage Multiple

From 2010, QE resulting in rising Leverage Multiples until 2014 from 4.3x to 5.3x

In late 2014, end of QE turning off the free flow of liquidity impacting Leverage Multiples going forward – 4.3x today

1,58 2,18 2,50 2,74 2,42 2,11 2,72 2,59 2,56 3,01 3,10 3,40 3,004,39 3,66 3,69

4,68 4,365,52 5,00 4,901,63 1,08 1,24 1,21 1,07 1,30

1,28 1,43 1,401,47 1,56 1,60

1,48

1,471,40 1,30

1,43 1,541,13

0,92 0,322,70 3,20 3,00 3,00

2,30 2,502,61 2,59 2,87

3,103,75 3,19

1,57

2,862,70 2,78

2,84 3,723,63

3,524,07

0,00

2,00

4,00

6,00

8,00

10,00

12,00

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Median Equity to EBITDA Median Junior Debt to EBITDA Median Senior Debt to EBITDA

12

3

9

1

2

3



Performance Indicators - Deal Gross IRR and Gross TVPI returns in US & EU, 2004-2017

5. Diverging gross returns, TVPIs tightening – how to invest?

Post-GFC Private Debt returns first decline then stabilize between 2009-14 during QE

Retreat of banks give way to Private Debt funds, underpinning debt pricing and supporting gross IRRs (shift in market Private Debt supply & demand)

IRR and TVPI returns “mismatch” since 2015: median 1.06x TVPI returns close to par in both US & EU

1,00

1,10

1,20

1,30

1,40

1,50

0,00%

5,00%

10,00%

15,00%

20,00%

25,00%

30,00%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Gros

s TV

PI

Gros

s IR

R

US & EU Private Debt Gross Returns

US Median IRR EU Median IRR US Median TVPI EU Median TVPI

21

3

2

1

3

Source: CEPRES PE.Analyzer, as of 03/01/2019

10







5. Conclusion

Agenda

11



Comparing Total Interest Across Target Company Size Ranges

Small Caps consistently richer post GFC

Source: CEPRES PE.Analyzer, as of 12/12/2018. Small caps defined as companies with less than US$10m of Entry EBITDA; Mid-market is Entry EBITDA between US$10-75m; Upper Mid-market is Entry EBITDA between US$75-100m; Large Cap is Entry EBITDA > US$100m.

5,00%

7,00%

9,00%

11,00%

13,00%

15,00%

17,00%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Median Total Interest Comparison Across Market Segments

Small Cap Total Interest, Entry EBITDA < US$10m MM Total Interest, Entry EBITDA US$10-75m

UMM Total Interest, Entry EBITDA US$75-100m Large Cap Total Interest, Entry EBITDA > US$100m

• Moderation for all segments since 2008/09, Small Cap and Mid-Market less affected

• More pricing volatility in Upper Mid-Market and Large Cap segments; strong rebound since 2010

• Small Cap market relatively stable pricing across cycles, richer pricing post-GFC

12



Comparing Debt Pricing 5-year Average Spreads

Small Cap pricing notable advantage over larger segments

Source: CEPRES PE.Analyzer, as of 12/12/2018. Small caps defined as companies with less than US$10m of Entry EBITDA; Mid-market is Entry EBITDA between US$10-75m; Upper Mid-market is Entry EBITDA between US$75-100m; Large Cap is Entry EBITDA > US$100m.

240292

160

-27

125

488441

138 144

275

579

333269

36

130

248

149

-22

171 150

339

41109

635

91

-108

131

-108-145-200

-100

0

100

200

300

400

500

600

700

2013 2014 2015 2016 2017

bps

Debt Pricing Spread Comparison Across Market Segments (bps)

Small Cap over MM Small Cap over UMM Small Cap over Large Cap MM over UMM MM over Large Cap UMM over Large Cap

5-year averages: Small Cap Mid-Market Upper Mid-Market

vs. MM: +158bps

vs. UMM: +297bps

vs. Large Cap: +269bps

vs. UMM: +139bps

vs. Large Cap: +111bps

vs. Large Cap: -28bps

13







5. Conclusion

Agenda

14



All US Private Debt deals with Entry EBITDA < $50m, investment years 1998-2017

The US Lower Mid-Market: a Private Debt segment of its own

Source: CEPRES PE.Analyzer, as of 12/12/2018. Average investment size is of realized deals only.

• 2,474 portfolio companies

• $38.2B gross invested capital

• $13.4m avg. investment size

• $31.8B of gross realized proceeds

• 3 months avg. time to 1st distribution

• Overall 17.3% median Gross IRR, 1.29x median

Gross TVPI

Key Facts:

A robust Private Debt market segment in the US centered around traditional industries such as Industrials and Consumers, the main drivers of the US economy.

15



Global Infrastructure Private Debt deals, investment years 1998-2017Infrastructure Private Debt: another alternative strategy

• 765 deals

• $20.5B gross invested capital

• $26.5m avg. investment size

• $16.2B of gross realized proceeds

• 5 months avg. time to 1st distribution

• Overall 15.3% median Gross IRR, 1.25x median

Gross TVPI

Key Facts:

0,00

0,20

0,40

0,60

0,80

1,00

1,20

1,40

1,60

1,80

2,00

0,00%

5,00%

10,00%

15,00%

20,00%

25,00%

30,00%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Gros

s TV

PI

Gros

s IR

R

Infrastructure Private Debt - Gross IRR and TVPI

Median TVPI Median IRR

Source: CEPRES PE.Analyzer, as of 12/12/2018. Average investment size is of realized deals only.

16



Conclusion: deep dive required to find opportunities & returnsGenerating investment returns in a maturing Private Debt asset class

17

1. Attractive IRR returns across PD market, but Net TVPI compression

2. Market structural shift to Senior, but Senior risk reflected in lower pricing− Inherent squeeze on returns, especially TVPIs− How to earn returns from PD investing?

3. Debt Pricing: the key return driver of PD− Small Cap & Mid-Market: richer & more stable pricing, consistent advantage of 100-300bps− US market outperforms EU; +300-400 bps− Infrastructure Debt & US Lower Mid-Market pricing?

4. Successful investing in PD:1. Define market niches based on your specs2. Analyze, understand, get evidence3. Make investment decisions based on empirical proof



Presented by Marc DellmannHead of Business Development at CEPRES

For more information contact: [email protected]

Find the presentation by following the link below:

https://www.cepres.com/latest-intelligence-for-gps-and-lps

18

https://www.pe-analyzer.org/register/



https://www.cepres.com/latest-intelligence-for-gps-and-lps

Reproduction or retransmission on whole or in part is prohibited except by permission. All rights reserved. The recipient acknowledges that CEPRES does not guarantee or warrant theinformation herein. In addition, errors may occur. The recipient also acknowledges that every business decision, to some degree or another, represents the assumption of some risk andthat CEPRES, in furnishing information, does not and cannot underwrite or assume recipients’ risk, in any manner whatsoever. The information in this proposal is provided “as is” withoutany representation or warranty of any kind. Information contained are published for the assistance of recipients, but are not to be relied upon as authoritative or taken in substitution forthe exercise of judgment by any recipient, they are subject to change without notice and not intended to provide the sole basis of any evaluation of the instruments discussed therein.CEPRES does not accept any liability whatsoever for any direct or consequential loss arising from any use of material contained in this proposal. The recipient will only use it forinternal purposes. Other uses are subject to the permission by CEPRES.

CEPRES HeadquartersNymphenburger Str. 3a80335 MunichGermanyTel: +49 89 232 495 610

Disclaimer

CEPRES Asia8 Marina ViewAsia Square Tower 1Singapore 018960Tel: +65 6407 1125

CEPRES North AmericaOne World Trade Center, 85th FloorNew York, NY 10006 USATel: +1 212 220 7193



US PRIVATE CREDIT INITIATIVES~ BAI WEBINAR

January 2019

This presentation is for information purposes only, is confidential and may not be reproduced in whole or in part (whether in electronic or hard-copy form).

A Committed Approach to Responsible Investing in Collaboration with Industry Leaders

A GLOBAL PRIVATE ASSETS EXPERT

Providing a specialized platform of private investment strategies

UN PRI signatory since 2008

USD 15BN+AUM1

1,200+Clients

Private Equity

Private Credit

Investment Strategies:Energy Infrastructure

Capital Dynamics comprises Capital Dynamics Holding AG and its affiliates. (1) Includes both discretionary and advisory assets as of September 30, 2018 across all Capital Dynamics affiliates. (2) Capital Dynamics AG was founded in 1999. Westport Private Equity Ltd, founded in 1988, was acquired in 2005. (3) Average years of experience held by Capital Dynamics’ Managing Directors and Directors in investment management across all platforms.

11Offices

160+Professionals

1988Year Founded

50+Investment professionals firm wide

20+ YEARSAverage experience for seniorInvestment professionals3

San Francisco New York

LondonBirmingham

ZugMunich

Seoul

Hong Kong

TokyoDubai2

Milan

3. US LOWER MID MARKET PRIVATE CREDIT FROM AN EUROPEAN INVESTOR PERSPECTIVE

Jens Ernberg, Managing Director

STATE OF U.S. PRIVATE CREDIT MARKET

4

ROBUST INVESTOR DEMAND COMPELLING MARKET DYNAMICS• Compelling risk-adjusted return

Attractive yield profile

Predictable income

Low volatility

Lack of correlation

Downside protection

Hedged against rising rates

• “All-weather” strategy

• Significant demand/ “filling a void”

Robust economic growth (U.S. market) driving the need for capital

Traditional lenders have abandoned the space

Record levels of Private Equity dry powder will fuel continued demand

• Borrower benefits

Speed

Flexibility

Investors are increasing allocations to private credit strategies under their alternatives “basket”

U.S. DIRECT LENDING INVESTMENT MERITS: A EUROPEAN PERSPECTIVE

5

ATTRACTIVE RELATIVE RETURNS STRUCTURAL CONSIDERATIONSDIVERSIFICATION

• Higher relative yields…

Return enhancement available through leveraged vehicle

Arranger-centric model

Tax efficient structure

• … are an offset to potential FX hedging costs

• Geographic diversification

• Significant addressable market

U.S. private credit total market size estimated to be over $900bn (over 80% to non-bank direct lenders) 1

EU private credit market size of €120bn (only 50% to non-bank lenders) 1

• Broad industry exposure

• One contiguous market

One language

One currency

One jurisdiction

One bankruptcy regime

0%

5%

10%

15%

20%

25%

30%

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Private Debt Market Gross IRR – US vs EUR

US Europe

18%

14%

Source: CEPRES PE. Analyzer

(1) Credit Suisse US Credit 2H Outlook, September, 2018.

STRUCTURAL CHANGES ARE CREATING CREDIT OPPORTUNITIES IN LOWER MIDDLE MARKET…

6

• Market consolidation among traditional lenders and, more recently, asset managers

• Record fundraising campaigns by incumbent private credit managers

• The GFC and changes to the regulatory environment has contributed to smaller lenders exiting the market or electing to be acquired

• Concentration of capital focused on the upper middle market and broadly syndicated market

• Fewer providers in the lower middle market leads to lower competitive intensity

COMPELLING RISK-ADJUSTED RETURNS

…AS SUPPLY AND DEMAND DYNAMICS HAVE EVOLVED

PRIVATE EQUITY & CREDIT DEMAND

254

385

615

752

963

2000 2005 2010 2015 2017

115100

108 106115

2013 2014 2015 2016 2017

(1) Source: Preqin Private Equity & Venture Capital Spotlight, Volume 13, Issue 3, March 2017. 2016 data as of June 2016. 2017 data as of July 2017, based on Preqin databasereported in Bloomberg on 9 August 2017. (2) Source: Preqin Quarterly Update: Private Debt, Q3 2017. Includes direct lending and mezzanine dry powder. 2017 data as ofSeptember 2017. (3) Number of commercial banks insured by the Federal Deposit Insurance Committee, as of June 2017.

Private Equity Dry Powder(in USD billions)1

Private Credit Dry Powder(in USD billions)2

LOWER MIDDLE MARKET FINANCING SUPPLY

Park View

7

Vs.

Middle Market Consolidation

Commercial Bank Licenses in US 3

0

2.000

4.000

6.000

8.000

10.000

12.000

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

YTD

WE ARE SEEING ATTRACATIVE RELATIVE YIELDS IN LOWER MIDDLE MARKET…

3-MONTH AVERAGE NEW-ISSUE YIELDS1 LOWER MIDDLE MARKET FOCUS/STRUCTURING RETURNS2

(1) LCD US Middle Market Stats, August 2018. (2) Capital Dynamics. Thomson Reuters LPC. Cliffwater Research, October 2017.Past performance is not a reliable indicator of future results.

8

50-150 bps

75-150 bps

2.0%

4.0%

6.0%

10.0%

Broadly Syndicated

Loans

Upper/SyndicatedMiddle Market Direct Lending

Lower Middle Market Direct

Lending

8.0%

Arranger/ Directly

Originated

6.4%

100-200 bps

Premium:225-500 bps

Asse

t-Le

vel U

nder

writ

ten

Aver

age

Yiel

d

7.3%

6.4%

4,0%

5,0%

6,0%

7,0%

8,0%

Middle Market (<$50m EBITDA) Large Corporate

12.0%

…WITH APPEALING RISK PROFILES COMPARED TO LARGER SIZED BUSINESSES

9

3,0x

3,5x

4,0x

4,5x

5,0x

5,5x

5,50%

6,00%

6,50%

7,00%

7,50%

8,00%

8,50%

9,00%

9,50%

< $5M $5-$15M $15-$25M $25-$40M > $40M

Tota

l Deb

t to

EBIT

DA

Yie

ld (3

yea

r ter

m)

EBITDA Range

3Q18: 1ST LIEN YIELDS VS. LEVERAGE BY EBITDA SIZE1

3Q18 1st lien Yield Total Leverage

(1) LPC’s 3Q18 Middle Market Sponsored Private/Club Deal Analysis, October 16, 2018. (excludes unitranche)

LOWER COMPETITIVE INTENSITY ALLOWS LENDERS TO MAINTAIN DISCIPINE

10

Investor Protection Lower Middle Market Upper Middle MarketBroadly Syndicated

MarketTTM Leverage (avg1) ~3.5x – 4.5x ~4.0x – 5.0x ~>5.0x

Equity cushions >45% >40% >35%

Financial maintenance covenants

Yes20-30% cushion

>75%Wide cushions NA

EBITDA definitions

Addbacks for fees, costs and expenses that are

reasonable and documented- often with a

dollar threshold for any TTM Period.

Numerous Addbacks including synergies and

cost savings up to 25% of EBITDA

For additional debt incurrence tests-

Numerous addbacks including synergies and

cost savings up to 40% of EBITDA

Restricted Payments Uncommon

Starter Basket plus an unlimited amount so long

as leverage is ~2x less than closing leverage

Starter Basket plus an unlimited amount so long as leverage is ~1x less than

closing leverage

(1) LPC’s 3Q18 Middle Market Sponsored Private/Club Deal Analysis, October 16, 2018. (excludes unitranche)

INVESTMENT MANAGER SELECTION IS IMPORTANT

11

Sourcing Strength

Experienced Team

Flexible Investment Mandate

Robust Platform

• Multi-channel sourcing delivers opportunities through the cycle• Maximizes investment opportunity set• Provides for credit discipline / selectivity• Drives portfolio diversification

• Structuring experience – focus on downside protection• Direct origination and underwriting capabilities• Ability to manage through cycles – familiarity with bankruptcy

regimes, creditor rights; hands-on restructuring experience

• Mandate that offers flexibility to invest in the most compelling opportunity given prevailing market conditions

• Proven underwriting and investment processes• Strong risk management infrastructure – people/IT• Resourced to support active portfolio management

Jens ErnbergManaging DirectorCapital Dynamics, Inc.Capital Dynamics Broker Dealer LLC10 East 53rd Street, 17th FloorNew York, NY 10022United States

[email protected]: +1 212 798 3418Mobile: +1 917 207 4121

Klaus GierlingManaging DirectorCapital Dynamics, Inc.Possartstrasse 1381679 MunichGermany

[email protected]: +49 89 2000 418-13Mobile: +49 172 1499 422

Markus LangnerManaging DirectorCapital Dynamics, Inc.Possartstrasse 1381679 MunichGermany

[email protected]: +49 89 2000 418-14 Mobile: +49 172 1499 420




4. North American Clean Energy Infrastructure Credit

Paul Colatrella, Managing Director

14

Why invest in clean energy infrastructure credit?

(1) Per Moody’s Infrastructure Default and Recovery Rate 1983-2016 study: Average Ba-rated cumulative default rates of infrastructure credit were 8% compared to 18% for non-financial corporate issuers, average senior secured recovery rates were 86% for infrastructure credit compared to 73% for non-financial corporate issuers, and average one-year rating volatility was 0.17 notches per Credit compared to 0.42 notches for non-financial corporate issuers.

• Asset value cyclicality• Energy & financial market

conditions

INFRASTRUCTUREBENEFITS

• Real assets• Long term useful lives• Inelastic demand

Low Market Correlation

• Leverage • Capital structure position• Credit document strength

EquityCREDIT

FEATURES

• Senior position• Secured by collateral• Protective covenants

Strong Cash Yield, Prepayment Protection

Compared to similarly rated corporate credits, infrastructure debt has a lower 10 year default rate (8% v. 18%), higher average recovery rate (86% v. 73%), and lower rating volatility according to a Moody’s study spanning 1983-20161

• Cash flow volatility• Project document strength

PROJECT FINANCE ATTRIBUTES

• Contracted cash flow• Allocation of risks• Nonrecourse / asset based

Capital Preservation

CLEAN RELIABLE ENERGY

• Solar PV• Onshore & offshore wind• Hydro & geothermal• Efficient natural gas power

generation, co-generation, distributed generation

• Contracted midstream assets• Energy & battery storage

Achieve ESG / Sustainability Goals

An optimal risk / return investment will be a function of:

15

Why focus on the North American market?

(1) Source: Thomson Reuters Global Project Finance Review (2) Renewable Assets (Owners) League Tables. Bloomberg New Energy Finance. October 31, 2018. Includes projects commissioned, financing secured and/orunder construction. Such information has not been independently verified by Capital Dynamics. The information provided herein is based on matters as they exist as of the date of preparation on October 31, 2018 andnot as of any future date. (3) 2018 Preqin Global Infrastructure Report.

LARGE OPPORTUNITY SET

EUROPEANCOMPARISON

NORTH AMERICA• Deregulation• Private asset

ownership• Potential for

higher yields despite FX costs

COMPELLING MARKET DYNAMICS

Investment diversity offers wide range of risk / return opportunities

$38

$14 $4

$2

$3Power

Oil & Gas

Transportation

Industrial

Other

USDbillions

Americas Project Finance Loans Q2 2017 – Q1 20181

Variety of regulatory models across regions

20,000 +generators

Multiple fuel sources

Mix of contractual off-take structures

Regional differences drive the increase in alternative lending

$24,9

$8,9

by Primary Geographic Focus, (USD billons)3

All time Unlisted Infrastructure Debt Fundraising

EUROPE• More regulation• Assets owned by utilities

and strategics• Project finance

dominated by banks and insurance companies

16

Projected Fuel Mix North American Electricity Generation1

(1) Source: Bloomberg New Energy Finance Outlook 2018. “Renewables” includes Hydro, Geothermal, Biomass, Onshore Wind, Offshore Wind, Utility-scale PV, Small-scale PV, and Solar thermal.

0%

20%

40%

60%

80%

100%

2012 2017 2022 2027 2032 2037 2042 2047

R E N E W A B L E S

N A T U R A L G A S

C O A L

N U C L E A R

What are the drivers of U.S. energy infrastructure investment?

RENEWABLES AND NATURAL GAS WILL DRIVE INVESTMENT OPPORTUNITIES

A Differentiated ApproachInteresting in the current market environment

18

CEIC targets an attractive and underserved market segment1

(1) There is no guarantee that the investment will be made in accordance with the terms shown or that the target returns will be achieved. The estimated target returns are gross of fees, expense and carried interest, which in the aggregate, may be substantial. Actual returns may be higher or lower.

CONCENTRATION OF PROJECT FINANCE BANKS / INSTITUTIONAL LENDERS

CONCENTRATION OF ENERGY INFRASTRUCTURE MEZZANINE FUNDS

RETU

RN T

ARG

ETS RISK SPECTRU

M

H I G H E R R I S K ▲

▼ L O W E R R E T U R N S

15% +

12%

10%

8%

6%

IRR

Attractive, underserved market segment

19

Key relationships, flexible capital and industry expertise all contribute to identifying the optimal relationship between risk and return in clean energy infrastructure credit

Source: There is no guarantee that the investment will be made in accordance with the terms shown or that the target returns will be achieved. The estimated target returns are gross of fees, expense and carried interest, which in the aggregate, may be substantial. Actual returns may be higher or lower.

Holding Company Loans /

Securitizations

Second Lien Loans /

Unitranche

Unitranche / Senior Loans

(1st lien)

SE

NI

OR

IT

Y

lower P R O J E C T R I S K higher

8-10% Return

Potential

EXPERTISEacross energy infrastructure to identify risks and structure appropriately

RELATIONSHIPSto source proprietary deal flow with premium terms and economics

FLEXIBILITY to seek optimal position in the credit capital structure relative to risk and target returns

20

Direct origination strategy and structuring capabilities enhance returns

2.0%

4.0%

6.0%

L+ 200 bps

Conforming Project Finance

Bank Loan

Additional Credit Risk Component(s)

Underwriting Origination Fees

8.0%

+50-150 bps

Indi

cativ

e Re

turn

s

+ 150 bps

+30-60 bps

Middle Market Illiquidity Premium

Prepayment Protection

10.0%

LIBOR[~250 bps]

4.5%

6% - 7.5%

+ 150 bps

+50 bps

8% - 10% Gross IRR

All-in Premium:

300 to 600 bps

MAJORITY OF RETURN IS CURRENT CASH YIELD1

(1) There is no guarantee that the investment will be made in accordance with the terms shown or that the target returns will be achieved. The estimated target returns are gross of fees, expense and carried interest, which in the aggregate, may be substantial. Actual returns may be higher or lower.

21

Key Clean Energy Infrastructure Investment Risks and Mitigants

(1) There is no guarantee that target returns will be achieved. The estimated target returns are gross of fees, expenses and carried interest, which in the aggregate may be significant. Actual returns may be higher or lower. (2) Per Moody’s ‘Infrastructure Default and Recovery Rate 1983-2015’ study

• No development risk taken• Require Proven Technology

from top tier providers (e.g. Siemens, GE, Mitsubishi, etc.)

Development and Technology Risks

• Permitting and regulatory risks

• Delay and Cost Overruns• Outages and Performance

• Long term Power Purchase Agreements and / or Hedges

• Electric Capacity Markets• Fuel Supply Agreements• Conservative underwriting

price decks

Commodity Price Risk

• Electric Market Prices• Fuel Supply and Price Risk• Mismatch and Basis Risk

Minimal Commodity and Price Risks

• Fixed price, date certain, turnkey EPC Contracts

• Long term Operating & Maintenance (O&M) Agreements and Equipment Service Agreements (LTSA)

Equity

Construction and Operating Risks

• Contracting Delays• Cost Overruns• Plant Outages and

Cost Containment

Minimal Construction and Operating Risks

No Development Risk and Limited Technology Risk

KEY ENERGY INFRASTRUCTURE

RISKS

KEY MITIGANTS

Project Finance structure allocates risks

away from borrower

22

Comparing risk and return by fund strategyVintage year 2005-2015

Source: 19 October 2018, Preqin Alternative Assets Monitor. Past performance is not a reliable indication of future performance. Net IRRs are net of all fees, expenses and carried interest.CEIC: Clean Energy Infrastructure Credit

The combination of infrastructure and direct lending asset classes offers compelling risk/return

Buyout

Direct Lending

Natural Resources

Real Estate

Secondaries

Distressed Debt

Early Stage

Fund of FundsGrowth

InfrastructureVenture Capital

4%

6%

8%

10%

12%

14%

16%

18%

0% 5% 10% 15% 20% 25%

RETU

RN: M

edia

n N

et IR

Rs (%

)

RISK: Standard Deviation of Net IRRs

CEIC Risk Profile

23

Executive summary

(1) There is no guarantee that target returns will be achieved. The estimated target returns are gross of fees, expense and carried interest, which in the aggregate, may be substantial. Actual returns may be higher or lower. (2) Represents investments prior to Paul Colatrella joining Capital Dynamics in 2018.

Clean Energy Infrastructure Credit in North America is an attractive investment opportunity for European Investors

Differentiated approach can yield optimal results

Compelling asset class

• Strong and stable cash yield1

• Protective credit benefits

• Attractive relative to similarly rated corporate debt

• Large opportunity set

• Seek opportunities in underserved area of the capital markets

• Target optimal risk / return niche 8 - 10% gross IRR1

• Provide flexible capital across debt securities and clean energy infrastructure asset class

Attractive in current market conditions

• Offering downside protection

• Secured by hard assets with long useful lives

• Non-correlated / low volatility

• Helping to meet ESG / Sustainability goals

Paul Colatrella

Managing Director,

Head of Clean Energy Infrastructure Credit

Capital Dynamics, Inc.10 East 53rd Street, 17th FloorNew York, NY 10022

[email protected]

Clean Energy Infrastructure Credit Team DACH Region Sales Team

Katherine McElroy

Director,

Clean Energy Infrastructure Credit

Capital Dynamics, Inc.

Capital Dynamics Broker Dealer LLC

10 East 53rd Street, 17th FloorNew York, NY 10022

[email protected]

Klaus Gierling

Managing Director,

Business Development, DACH

Capital Dynamics GmbHPossartstrasse 1381679 Munich, Germany

[email protected]

Direct: +49 89 2000 418-13

Authorised Advisers of:

Capital Dynamics Ltd

Whitfield Court30-32 Whitfield StreetLondon W1T 2RQ, UK

Markus Langner

Managing Director,

Business Development, DACH

Capital Dynamics GmbHPossartstrasse 1381679 Munich, Germany

[email protected]

Direct: +49 89 2000 418-14





25

DISCLOSURE STATEMENT

For investors based in the United Kingdom and the European Union, this presentation is being communicated to you by Capital Dynamics Ltd (CDL). CDL is a firm authorized and regulated by the UK Financial Conduct Authority as an Alternative Investment Fund Manager.

For all other investors, the presentation is being communicated by the firm entity acting as the manager or general partner, adviser to the client or such other firm entity authorized to make this communication as appropriate.

Capital Dynamics Group is an independent asset management firm focusing on private assets and comprises Capital Dynamics Holding AG and its affiliates.

26

DISCLAIMER

“Capital Dynamics” comprises Capital Dynamics Holding AG and its affiliates.

The information contained herein is provided for informational purposes only and is not and may not be relied on as investment advice, as an offer to sell, or a solicitation of an offer to buy securities. Any such offer orsolicitation shall be made pursuant to a private placement memorandum furnished by Capital Dynamics. No person has been authorized to make any statement concerning the information contained herein other thanas set forth herein, and any such statement, if made, may not be relied upon. This document is strictly confidential, is intended only for the person to whom it has been and may not be shown, reproduced orredistributed in whole or in part (whether in electronic or hard copy form) to any person other than the authorized Recipient, or used for any purpose other than the authorized purpose, without the prior writtenconsent of Capital Dynamics.

Further, this document may contain information that has been provided by a number of sources not affiliated with Capital Dynamics. Capital Dynamics has not verified any such information. Nothing contained hereinshall constitute any representation or warranty and no responsibility or liability is accepted by Capital Dynamics as to the accuracy or completeness of any information supplied herein.

This document may contain past performance and projected performance information. It must be noted that past performance and projected performance is not a reliable indicator or guarantee of future results andthere can be no assurance that any fund managed by Capital Dynamics will achieve comparable results. Certain statements contained in this document may include statements of future expectations and other forward-looking statements. Due to various risks and uncertainties, actual events or results or actual performance may differ materially from those reflected or contemplated in such forward-looking statements.

Except where otherwise indicated herein, the information provided herein, including any forecasts contained herein and their underlying assumptions, are based on matters as they exist as of the date of preparationand not as of any future date, and will not be updated or otherwise revised to reflect information that subsequently becomes available, or circumstances existing or occurring after the date hereof. Capital Dynamicsdoes not purport that any such assumptions will reflect actual future events, and reserves the right to change its assumptions without notice to the Recipient. Any forecasts contained herein are intended to be providedin on-on-one presentations to the Recipient. Capital Dynamics has not independently verified the information provided and does not assume responsibility for the accuracy or completeness of such information.

The Recipient should not construe the contents of this document as legal, tax, accounting, investment or other advice. Each investor should make its own inquiries and consult its advisors as to any legal, tax, financialand other relevant matters concerning an investment in any fund or other investment vehicle. Capital Dynamics does not render advice on tax accounting matters to clients. This document was not intended or writtento be used, and it cannot be used by any taxpayer for the purpose of avoiding penalties which may be imposed on the taxpayer under U.S. federal tax laws. Federal and state tax laws are complex and constantlychanging. The Recipient should always consult with a legal or tax adviser for information concerning its individual situation.

When considering alternative investments, such as private equity funds, the Recipient should consider various risks including the fact that some funds may use leverage and engage in a substantial degree of speculationthat may increase the risk of investment loss, can be illiquid, are not required by law to provide periodic pricing or valuation information to investors, may involve complex tax structures and delays in distributingimportant tax information, often charge high fees, and in many cases the underlying investments are not transparent and are known only to the investment manager. Any such investment involves significant risks,including the risk that an investor will lose its entire investment.

By accepting delivery of this document, each Recipient agrees to the foregoing and agrees to return the document to Capital Dynamics promptly upon request.

27

MATERIAL NOTES TO INVESTORS – Private Credit

The United Kingdom

This document has been issued by Capital Dynamics Limited who is authorised and regulated by the Financial Conduct Authority (“FCA”). This document is addressed only to persons fallingwithin one or more of the following exemptions from the restrictions in section 21 of the Financial Services and Markets Act 2000 (“FSMA”):

• authorised firms under FSMA and certain other investment professionals falling within article 19 of the FSMA (Financial Promotion) Order 2005 (“FPO”) and their directors, officers andemployees acting for such entities in relation to investment; and

• high value entities falling within article 49 FPO and their directors, officers and employees acting for such entities in relation to investment,

in addition to other persons who are classified as a Professional Client or Eligible Counterparty in accordance with the rules of the FCA. Accordingly, this document is not required to complywith the detailed rules on financial promotions in the FCA's Conduct of Business Sourcebook. The distribution of this document to any person in the United Kingdom not falling within oneof the above categories is not permitted by the Issuer and may contravene FSMA. No person falling outside those categories should treat this document as constituting a promotion to him,or act on it for any purposes whatsoever.

Austria, Belgium, Cyprus, Czech Republic, Denmark, Finland, France, Germany, Greece, Liechtenstein, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Republic of Ireland,Spain, Sweden: Material is presented to investors qualifying as professional investors (as that term is defined under the Alternative Investment Directive) by Capital Dynamics Ltd. CapitalDynamics Ltd is authorized and regulated by the Financial Conduct Authority (FCA). Any Recipient not interested in the analysis described herein should return this document to CapitalDynamics Limited, Whitfield Court, 2nd Floor, 30-32 Whitfield Street, London W1T 2RQ, United Kingdom and contact Capital Dynamics as soon as possible (t. +44 20 7297 0200).Furthermore, please kindly note that any fund to which this document relates does not exist as at the date of this document and it is not yet possible to subscribe for interests in such fund.Capital Dynamics Limited reserves the right to amend or change the purpose (also in a material way) of any fund to which this document relates or to decide not to proceed with theestablishment of a new fund. Additional information for investors based in Germany: Capital Dynamics GmbH is registered as an investment intermediary (“Finanzanlagenvermittler”)according to § 34f para. 1 sentence 1 no. 2 and 3 German Commerce and Industry Regulation Act with the Chamber of Commerce and Industry Munich (Balanstr. 55 – 59, 81541 Munich).The register number is D-F-155-9YP3-61. The registration is published on the following website: www.vermittlerregister.info.

Switzerland: This document does not constitute an offer or a distribution of commitments to any person in Switzerland, or an invitation to participate in any fund to which this documentrelates by any person in Switzerland. Such fund has not appointed a Swiss representative or a Swiss paying agent and the commitments in such fund may therefore not be distributed toinvestors in or from Switzerland. The intention is to establish a Luxembourg feeder fund which will appoint State Street Bank GmbH, Munich, Zurich Branch, Beethovenstrasse 19, P.O. Box,Ch-8027 Zurich, Switzerland, as its Swiss representative and paying agent. Any distribution of shares in the Luxembourg feeder fund in Switzerland would be exclusively made to, anddirected at, qualified investors, as defined in the Swiss Collective Investment Schemes Act of 23 June 2006, as amended and its implementing ordinance. Accordingly, the Fund has not beenand will not be registered with the Swiss Financial Market Supervisory Authority FINMA.

28

MATERIAL NOTES TO INVESTORS - CEIC

The United Kingdom

This document has been issued by Capital Dynamics Limited who is authorised and regulated by the Financial Conduct Authority (“FCA”). This document is addressed only to persons falling within one or more of thefollowing exemptions from the restrictions in section 21 of the Financial Services and Markets Act 2000 (“FSMA”):

• authorised firms under FSMA and certain other investment professionals falling within article 19 of the FSMA (Financial Promotion) Order 2005 (“FPO”) and their directors, officers and employees acting for suchentities in relation to investment; and

• high value entities falling within article 49 FPO and their directors, officers and employees acting for such entities in relation to investment,

in addition to other persons who are classified as a Professional Client or Eligible Counterparty in accordance with the rules of the FCA. Accordingly, this document is not required to comply with the detailed rules onfinancial promotions in the FCA's Conduct of Business Sourcebook. The distribution of this document to any person in the United Kingdom not falling within one of the above categories is not permitted by the Issuer andmay contravene FSMA. No person falling outside those categories should treat this document as constituting a promotion to him, or act on it for any purposes whatsoever.

Austria, Belgium, Cyprus, Czech Republic, Denmark, Finland, France, Germany, Greece, Liechtenstein, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Republic of Ireland, Spain, Sweden: Material ispresented to investors qualifying as professional investors (as that term is defined under the Alternative Investment Directive) by Capital Dynamics Ltd. Capital Dynamics Ltd is authorized and regulated by the FinancialConduct Authority (FCA). Any Recipient not interested in the analysis described herein should return this document to Capital Dynamics Limited, Whitfield Court, 2nd Floor, 30-32 Whitfield Street, London W1T 2RQ,United Kingdom and contact Capital Dynamics as soon as possible (t. +44 20 7297 0200). Furthermore, please kindly note that any fund to which this document relates does not exist as at the date of this document andit is not yet possible to subscribe for interests in such fund. Capital Dynamics Limited reserves the right to amend or change the purpose (also in a material way) of any fund to which this document relates or to decidenot to proceed with the establishment of a new fund. Additional information for investors based in Germany: Capital Dynamics GmbH is registered as an investment intermediary (“Finanzanlagenvermittler”) accordingto § 34f para. 1 sentence 1 no. 2 and 3 German Commerce and Industry Regulation Act with the Chamber of Commerce and Industry Munich (Balanstr. 55 – 59, 81541 Munich). The register number is D-F-155-9YP3-61.The registration is published on the following website: www.vermittlerregister.info.

Switzerland: This document does not constitute an offer or a distribution of commitments to any person in Switzerland, or an invitation to participate in any fund to which this document relates by any person inSwitzerland. Such fund has not appointed a Swiss representative or a Swiss paying agent and the commitments in such fund may therefore not be distributed to investors in or from Switzerland. The intention is toestablish a Luxembourg feeder fund which will appoint State Street Bank GmbH, Munich, Zurich Branch, Beethovenstrasse 19, P.O. Box, Ch-8027 Zurich, Switzerland, as its Swiss representative and paying agent. Anydistribution of shares in the Luxembourg feeder fund in Switzerland would be exclusively made to, and directed at, qualified investors, as defined in the Swiss Collective Investment Schemes Act of 23 June 2006, asamended and its implementing ordinance. Accordingly, the Fund has not been and will not be registered with the Swiss Financial Market Supervisory Authority FINMA.

BAI webinar „US Private Credit“ – regulatory update › fileadmin › PDFs › DE › Events...

Documents

Transcript of BAI webinar „US Private Credit“ – regulatory update › fileadmin › PDFs › DE › Events...