[VIDEO] Beyond Real Estate: A Look at Private Credit

We recently rolled out a webinar series, "Beyond Real Estate: What Else is Out There?", in an effort to educate reps and financial advisors about a variety of asset classes that extend beyond the most common alternative investment type—real estate.

In Part 1 of the series, our panelists discuss private credit. First, a quick definition:

Joey Roth, Principal at Eagle Point Credit Management explains what senior secured loans are within the private credit asset class and why it may be attractive to some investors.

In the video clip below, he highlights a couple of key things about the senior secured loan market:

• Historically speaking, senior secured loans have generated a higher recovery than any other type of credit product in a company's capital structure. That means that in the event of default, if you're a senior secured lender as opposed to an unsecured bondholder, you expect to generate a higher recovery and recover more of your capital.
• It offers consistent data going back to the early 90s and has never experienced two consecutive down years in a row.
• Senior secured loans often have up to a 50% cushion of junior capital.
• These loans include larger companies with active markets to buy, sell and trade on a secondary basis.

He continues by discussing how his firm invests in senior secure loans in a pooled vehicle called a collateralized loan obligation (CLO). CLOs offer:

• Diversification with more than 1,200 large U.S. companies in the portfolio.
• Default rates as low as .26% compared to a market average of 1.7%.

Watch the full clip:

The full webinar is available to watch on our YouTube channel!

Note: Amounts shown in the video clip above are rounded and therefore totals may not foot.
1.Annualized Distribution Rate reflects distributions for the quarter ending in September 2023 annualized and divided by the prior quarter end Public Offering Price. The Annualized Distribution Rate is not a guarantee of future returns and future performance may vary. The timing and frequency of distribution payments is not guaranteed.  Such variance may be material and adverse, including the potential for full loss of principal and no distributions. In considering returns, investors should bear in mind that historical performance is not a guarantee, projection or prediction and is not indicative of future results. Actual net returns in any given year may be lower than the historical returns. Investment return and principal value of any investment will fluctuate and may be worth more or less than the amount initially invested. Distribution payments are not guaranteed. Distributions may be comprised of any combination of 1) net investment income and/or 2) net capital gain, and, if the Fund distributes an amount in excess of net investment income and net capital gains, a portion of such distribution will constitute a return of capital. A distribution comprised in whole or in part by a return of capital does not necessarily reflect the Fund’s investment performance and should not be confused with “yield” or “income.” A return of capital distribution may reduce the amount of investable funds. The actual components of the Fund’s distributions for U.S. tax reporting purposes can only be finally determined as of the end of each fiscal year of the Fund and are thereafter reported to shareholders on Form 1099-DIV.
2.Coverage calculated as net investment income divided by distributions paid from January 1, 2023 through June 30, 2023.
3.AUM is estimated as of June 30, 2023 and includes unfunded commitments. Includes assets managed by Eagle Point Income ManagementLLC, a majority-owned subsidiary of Eagle Point Credit Management LLC.
4.The information presented herein is on a look-through basis to the collateralized loan obligation, or “CLO”, equity held by the Fund as of August 31, 2023 (except as otherwise noted) and reflects the aggregate underlying exposure of the Fund based on the portfolios of those investments. The data is estimated and unaudited and is derived from CLO trustee reports received by the Fund relating to August 2023 and from custody statements and/or other information received from CLO collateral managers and other third party sources. Information relating to the market price of underlying collateral is as of month end; however, with respect to other information shown, depending on when such information was received, the data may reflect a lag in the information reported. As such, while this information was obtained from third party data sources, June 2023 trustee reports and similar reports, other than market price, it does not reflect actual underlying portfolio characteristics as of August 31, 2023 and this data may not be representative of current or future holdings. Industry categories are based on the S&P industry categorization of each obligor as reported in CLO trustee reports to the extent so reported. Certain CLO trustee reports do not report the industry category of all of the underlying obligors and where such information is not reported, it is not included in the summary look-through industry information shown. As such, the Fund’s exposure to a particular industry may be higher than that shown if industry categories were available for all underlying obligors. In addition, certain underlying obligors may be re‐classified from time to time based on developments in their respective businesses and/or market practices.
5.Please read the prospectus for more details about the Fund and its terms.
6.Share price reflects NAV plus 6.75% upfront load (maximum sales load, comprised of 6.00% selling commission and 0.75% dealer manager fee).
7.Returns are not annualized and returns are as of August 31, 2023. Inception date is June 1, 2022. Returns shown reflect the percent change in NAV per share from the beginning of the applicable period, plus the amount of any distribution per share declared in the period. All returns shown assume reinvestment of distributions pursuant to the Fund’s distribution reinvestment plan, are derived from unaudited financial information and are net of all Fund expenses, including general and administrative expenses, transaction related expenses, management fees, and incentive fees. Past performance is not indicative of, or a guarantee of, future performance. Returns listed as “(max sales charge)” assume payment of the full upfront sales charge at initial subscription (6.75%). Return information is not a measure used under GAAP. The returns have been prepared using unaudited data and valuations of the underlying investments in the Fund’s portfolio, which are estimates of fair value and form the basis for the Fund’s NAV. Valuations based upon unaudited reports may not correspond to realized value and may not accurately reflect the price at which assets could be liquidated. Performance reflects certain expense limitation and fee waiver arrangements in effect during the periods shown. Absent these arrangements, the Fund’s performance would have been lower. Certain expenses paid by Eagle Point Credit Management or its affiliates on the Fund’s behalf are subject to reimbursement by the Fund for up to three years (which reimbursement would have the effect of reducing the Fund’s performance). Performance does not reflect the impact of federal, state or local taxation to which an investor may be subject.