1. “INNOVATION, INDEPENDENCE, INTEGRITY”
Presented by:
Berisford Grey
CEO Sygnus Capital Ltd
Non-Traditional Financing - The Case for Private Credit Investments

2. Private Market and Private Credit Investments (PCI): Definitions
The Private Market is defined as closed-end funds investing in private equity, real estate, private credit / private debt, infrastructure, and natural resources. It excludes Hedge Funds and publicly traded open-end funds. 01
Private Credit / Debt
Debt financing and bilateral credit from non-banks: direct lending, distressed debt, mezzanine debt, special situations & venture debt 02
Infrastructure
Closed-end funds that invest in large-scale projects, excluding investments in public-infrastructure firms and listed funds 03
Real Estate
Closed-end funds that invest in property, excluding: direct holdings, listed real estate (REITS) and open ended funds 04
Natural Resources
Closed-end funds that invest in real assets such as energy, agriculture/farmland, metals and mining, timberland, and water
Private Equity is 2.4 Trn, Real Estate ius 795 Bn, Private Debt 595B, Natural Resources 455Bn, Infrastructure 373 Bn 05
Private Equity
Buyouts, Venture Capital, Turnaround and Growth Equity
Source: :Prequin Global Private Debt Report

3. Global PCI Ecosystem 01 02 03 04 05 07 08 06 Record $595 bn AUM
Private Credit has the third largest AUM at a record $595bn (12.7%) within the $4.7 Tn Private Market, which is lead by Private Equity with $2.5Tn (53%) followed by Real Estate with $795bn (17%). 01
Record $595 bn AUM
Private Credit Jun ’16
$93 Bn raised in capital 02
11.4% CAGR
Growth Dec ‘10 to June ‘16 03
Record $130bn Raised
Through 3Q of 2017 04
Record $100bn
Capital distributed (dividends etc.) back to investors in ‘16 05 4x
AUM has quadrupled since $147bn in ’06 06
10 Consecutive Years
Unbroken AUM growth since 2006, even during global credit crisis in ’08 (up 20%) and ’09 (up 14%) 07
Investor Location
North 9% 08
Source of Investments
Pension
Insurance
Investors: Pension Funds, Foudations at 13%, Endowments at 9%, Insurance Company 9%,
Source: Prequin Global Private Debt Reports; Prequin Alternative Assets Performance Monitor

4. 01 02 03 04 Why Companies Are Attracted TO PCI?
Top four characteristics of private credit that firms value most: 01 02 03 04
Complex Deal Structures
Flexibility of Terms
Speed and Agility
Partnership Model
Speed combined with rigor and ability to finance in size; reduced layers of management structure and decision making for approval
Long term relationship model to foster repeated business; board observation rights or board seats
Investments are Structured to match business strategy; Use of customized structures - profit sharing, flexible amortization, higher LTV etc
Ability to put together package that works in best interest of borrower as well as safeguard long term future of business; vs template structuring of traditional financing
Anything complex will attract higher risk weighting on bank balance sheet
Source: Financing the Economy 2016 – The Role of alternative asset managers in the non-bank lending environment – Deloitte and AIMA. org

5. Why PCI is an Attractive Asset Class?
The growth in Private Credit has been explosive due to the following reasons: 1
Attractive Risk Adjusted Target Returns with Downside Protection
Attractive stable spreads above corporate, sovereign and high yield bonds; pays an “illiquidity premium”. US Private credit currently yields 8%+ currently, with 90% payout of earnings as distributions on a quarterly basis. 2
Low Correlation with other Asset Classes
Generates positive alpha due to low correlation with traditional asset classes. Diversification across sectors, industries, strategies, and geographies. 3
Risk Reduction
Generally stable performance across all market cycles. E.g. many US private credit managers are primed to benefit from gradually rising US interest rates due to underlying variable rate credit investments. Historically lower default rates and higher recovery rates than EM debt and bank loans.
Golub Capital Article 4
Well established Asset Class
Highly experienced fund managers with a wide menu of fund strategies and differentiated approaches. Viable alternative to traditional fixed income for fund managers seeking consistent stream of cash flow.

6. Sygnus Credit Investments
PCI Case Studies –
Sygnus Credit Investments
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7. CONVERTIBLE PREF. SHARE WITH PAYMENT-IN-KIND (PIK)
Case Study I: Sygnus Credit Investments
CONVERTIBLE PREF. SHARE WITH PAYMENT-IN-KIND (PIK)
Investment Size: J$580 Million
Term: 5-years
Date Closed: August 2017
Industry: Manufacturing
Proceeds used to refinance debt & expansion
Issuer benefited from increased cash flow due to interest only payments
PIK feature enabled lower interest payments to boost profitability from higher cashflow reinvestment.
Utilized Co-investor participation
Double digit return to SCI and Co-investor

8. INVENTORY LINKED REPO NOTE FINANCING
Case Study 2: Sygnus Credit Investments
INVENTORY LINKED REPO NOTE FINANCING
Investment Size: US$3.0 Million
Date Closed: September 2017
Industry: Distribution & Manufacturing
Proceeds used to fund working capital using Inventory Repurchase Agreement between SCI and Company
Issuer monetized its inventory and improved its cash flow
This innovative structure improved leverage ratios and profitability for the issuer
Double digit return to SCI

9. Thank you