Magic Markets #114: Private Debt and Property in a Rising Rate Environment

Regular listeners of Magic Markets have learnt a great deal about alternative investments and private deals, thanks to the various professionals at Westbrooke Alternative Asset Management who have joined us on the show.

Richard Asherson and James Lightbody join us this week to update us on the UK market and the conditions under which the Westbrooke Yield Plus fund operates. The focus of the fund is capital preservation, and with it now turning 5 years old and having consistently delivered in the target return band of cash plus 5% to 7% in GBP, we wanted to go deeper into the success and challenges.

The fund delivers an asymmetric risk/return profile to investors, by focusing on providing loans to lower and middle-market UK companies and real estate sponsors. 

We touched on topics including:
• The way property valuations behave in a time of rising interest rates and lower cap rates
• Pricing for risk in the capital stack, particularly as loan-to-value ratios change over time
• The importance of being strict and saying no to marginal opportunities, with a lovely quote in the show that “deals are like busses – one comes around every five minutes!”
• The way in which Westbrooke competes against traditional banks in debt-led structures
• The relative appeal of debt vs. equity in this environment
• The evolution of market conditions: post-COVID vs. pre-COVID
• A couple of real-world examples of transactions that Westbrooke has been involved in

For more information on Westbrooke’s alternative asset strategies, be sure to visit www.westbrooke.co.za to find out more. You can also find Westbrooke on Twitter @WAAM_SA or on LinkedIn. Westbrooke Alternative Asset Management is an authorised Financial Services Provider, FSP number 46750.