How to Evaluate the Quality of a Private Debt Fund?

If you’re comparing private debt funds, you will have quickly discovered that not all funds are created equal. But, how can you truly tell a quality private debt fund from an average one?

Being able to distinguish between private debt companies and choose one that aligns with your investment goals and values is a huge undertaking. Quality matters, and in this article, we’ll outline how you can evaluate the quality of a private debt fund to find one that suits your needs. In doing so, you’ll be able to make an informed investment decision.

1. Clear investment strategy philosophy alignment.

One of the first things to look for when evaluating a private debt fund is the alignment between the fund's investment strategy and your objectives. At Bowery, our primary focus is ensuring the security of your investment — which is every investor’s focus as well.?

There’s significant synergy between Bowery and our investors because we stand behind every investment decision we make. And we’re not just saying that — we invest our own money. By financially backing deals, we are partnering with our investors. We prioritise the safety of our investments.?

Additionally, we provide investors with the flexibility to choose their investments through contributory deals rather than pooled funds. This allows for greater visibility and customisation to meet individual needs, with the ability to enjoy diversification manually if desired. Your personal investment strategy and the fund’s strategy absolutely must line up.

2. Due diligence & sponsorship quality.

Another differentiator for us is the strength and quality of our borrowers, including their liquidity and cash flow, which adds an extra layer of security to your investments.

But don’t just take our word for it. Scrutinising the due diligence process of Fund Managers is crucial. We encourage interested investors to utilise their internal investment committees and/or third parties to verify the quality and reliability of our investments. You’ll get the full picture of what happens behind the scenes here, adding peace of mind when it comes to our processes and confidence when it comes to our investment decisions.

3. A clear & secure exit strategy.

Be wary of funds that don’t have defined exit strategies. Choose a fund that takes extra time to provide clarity regarding exit strategies, like we do. In the event that a borrower cannot repay, we ensure there is guaranteed collateral in the form of properties that Bowery can seize and liquidate to repay investors, safeguarding your interests. A clear exit strategy is paramount.

There?are?4?other?criteria?to?evaluate?the?quality?of?a?private?debt?fund.?To?read?the?full?article,?visit:?https://www.bowerycapital.com.au/evaluate-quality-private-debt-fund/