Riverstone Credit Opportunities Income aims to provide investors with a high level of income, targeting a dividend yield of 8-10%, by providing senior-secured loans to medium-sized energy-related companies. The trust will invest exclusively in the global energy sector, where demand for capital remains strong despite fluctuating commodity prices.
Key details on the profile of the assets to be targeted include:
- Typical deal size: $25-175m; targeting lower and middle market companies that do not conform to the requirements of traditional financing sources;
- Will primarily focus on companies that are temporarily unable to access more traditional sources of debt financing. The company does not generally expect to focus on small to middle-sized energy companies which it does not believe will ultimately develop traditional lender ‘‘conforming’’ characteristics, either in terms of size or the maturity of their asset base;
- Will seek to construct a portfolio of investments that is diverse within the energy industry. Riverstone Credit Opportunities expects to invest across the entire energy value chain, reviewing opportunities in the upstream, midstream, and downstream sub-sectors, along, and to a lesser degree, oilfield services, power and coal investments;
- Will seek to ensure that the company invests across an appropriately diverse set of geographies and with an end-market exposure to a mix of different commodities so that, as markets and drilling technologies evolve, the company will not be overexposed to any one area that might fall out of favour;
- While the company has a global mandate, investments will initially focus on North America, where the manager has extensive experience;
- No more than 15% of the company’s gross assets will be accounted for by any single borrower and only borrowers with a total indebtedness of less than 60% of gross assets will be invested in by the company.
You can access the fund’s website here