The Strategy 2018-12-21T11:19:54+00:00

The Strategy

INVESTMENT THESIS

With regulation driving up capital charges, it is increasingly difficult for banks to act as asset managers. This is where Revolution, as a private debt manager investing in secured loans and asset backed securities, is uniquely placed to capitalise on this opportunity.

The Revolution strategy is a long term investment that aims to deliver a return of cash plus 4% to 5% pa (before fees and expenses).

The investment activities of the Fund are focused on the most compelling relative value opportunities across real estate debt, Asset-Backed Securities (ABS), private company debt and Leveraged Buyout (LBO) debt. The underlying focus of the Fund is on capital preservation.

Market Opportunity

Targeting inefficient markets allows us to capitalise on the lack of competition in Australia for private lending.

Sourcing Opportunity

We gain access to large deal flow via long-standing relationships with private equity and specialty finance companies.

Investment Capabilities

Our capabilities are further strengthened by our investment in proprietary modelling, systems and technology.

Preserving capital

We put structural protection mechanisms in place designed to preserve capital, including covenants and levels of credit enhancement.

INVESTMENT PHILOSOPHY AND PROCESS

Our investment philosophy is centred on capital preservation and delivering long term value to our investors. As an experienced investment management team in Australian private debt, we are focused on identifying relative value opportunities, to capture illiquidity premia and generate alpha from specialist debt markets.

Our disciplined investment process results in a portfolio comprising optimal relative value across private company and leveraged buy-out debt, asset backed securities (ABS) and commercial real estate lending.

Initial Screen and Relative Value

Originate, screen and quantify opportunities.

Extensive Research / Due Diligence

Intensive credit and financial analysis / qualitative review of management.

Disciplined Approval Process

Unanimous approval process from the Investment Committee.

Continuous Portfolio Review

Active management and constant monitoring.

  • Additional governance is provided via the Investment Committee that oversees major decisions.
  • Our Environmental, Social and Governance (ESG) policy framework ensures such principles are considered at all stages of the process, from initial screening, through the due diligence phase, approval and ongoing monitoring.
  • For a copy of the ESG policy, contact us.
Private debt offers strong diversification with low volatility and low correlation to public markets.
Simon Petris Ph.D | Executive Director and Senior Portfolio Manager

WHAT WE OFFER OUR CLIENTS

  • Access to a capital stable portfolio that targets a return of cash plus 4% to 5% p.a (before fees and expenses).
  • A credit investment uncorrelated to traditional asset classes.
  • Low volatility through credit discipline with a strong focus on capital preservation.
  • A highly experienced investment team with in-depth market knowledge of the Australian private debt market.
Now that Revolution has reached its first close, I can confirm that Australian Catholic Superannuation is a cornerstone investor in the Fund. This is consistent with our efforts to back great Australian managers at an early stage. We have a long relationship with Revolution’s principal Mr Bob Sahota.

The Australian Catholic Superannuation and Retirement Fund is always looking to diversify its portfolio so that it is safer and more robust, in volatile investment markets. Given that credit spreads are historically narrow, equities and bonds are historically expensive, Australian Catholic Superannuation believes that adding loans is a good addition to certain portfolios. Senior loans rank ahead of equity and are a useful way of reducing and diversifying equity risk whilst still maintain a good real return.

Michael E Block | Chief Investment Officer, Australian Catholic Superannuation and Retirement Fund