risks.

The following risks may be materially relevant but may not always be adequately captured by the summary risk indicator and may cause additional loss: Counterparty risk, Concentration risk and Model risk.


Sustainable Private Credit 

financing climate solutions at scale with private debt.

We invest in companies which actively support the climate transition.

How? By taking a solutions-based approach, purposefully lending to firms seeking private debt capital to scale their impact in contributing to a global net-zero pathway. 

The outcome? A sustainability approach that seeks to deliver compelling risk-adjusted returns while delivering measurable impact – with capital preservation a priority.

clean solutions at scale.

We believe some of the most compelling opportunities today come from selectively catalysing the scaling-up of providers of sustainable goods, services or distributed real assets that are disrupting idle, carbon-intensive infrastructure.

While a surge of capital seeks to deploy into megatrends, most climate solution providers operate within fragmented markets which are just beyond the reach of traditional debt financing.

Our collaborative financing approach seeks to unlock a path to greater scale for these companies by providing USD 15-25 million secured credit facilities and best-in-class sustainability resources, which attract lower-cost capital. This has helped drive outperformance while targeting USD 1.4 billion1 in follow-on equity commitments into our investee companies and their affiliates – proof of our ability to help climate-focused firms achieve scale.

Our focus: six specialisms in distributed clean industries.

the opportunity.

With USD 24.5 trillion of capital expenditure to be deployed in electrification this decade alone, and a structural shift towards the decentralisation of the energy system, we anticipate a generational opportunity for impact investing that is non-concessionary: contributing to sustainability solutions while aiming to generate strong financial returns.

We see deep alignment between profit and purpose – particularly where sustainable solutions provide an opportunity to disrupt established markets that serve essential needs while delivering excess value to stakeholders.

This alignment of returns is additionally supported by considerable policy tailwinds, which may drive resilience and lessen correlation with broader economic trends. With decentralisation a secular trend in many markets, we believe private credit is playing a key role in aggregating proven solutions while creating value for both investors and portfolio companies.

delivering impact.

 

Source: LOIM Research. For illustrative purposes only. There is no guarantee that a target objective will be reached (not an accurate indicator).

our strategy.

Our targeted private credit strategy provides exclusive access to (typically) smaller opportunities via our proprietary network of personal contacts – opportunities that simply don’t reach the market.

As such, these more focused, smaller credits, are originated through our close networks, often with shorter maturities, meaning investors.

Additionally, our robust covenants ensure bespoke deal terms, providing early warning triggers should we need to withdraw our lending if these are transgressed, e.g. a predefined debt to equity ratio, revenues, or M&A activity.  

  • Hands-on sustainable investment approach to deliver capital and purposeful engagement to companies at critical inflection points
  • Help catalyse growth potential and measurable impact, seeking to mobilise further capital at greater and lower cost for our investees
  • Active stewardship strategy to support our portfolio companies in becoming the next generation of climate leaders

key portfolio characteristics.

 

LOIM Sustainable Private Credit Fund

Traditional direct lending

Deal size range

USD 10 – 50 million

USD 75 – 150 million

Origination focus

Founder-owner-managers

Financial sponsors

Sourcing process

Off-market, less competitive

Competitive auction process

Sourcing channels

Relationship / referral-based

Bank / sponsor syndicates

Structural emphasis

Senior secured / shorter duration

Senior secured to junior mezzanine

Covenants

Robust & bilaterally negotiated

Market-based

Documentation

Strong structural control

Less structural control

Source of alpha

Stewardship & complexity premium

Fund leverage

Equity participation

Additional upside via equity alignment

Not typically available 

Source: LOIM 2023. For illustrative purposes only.

why us?

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Distinctive focus

We seek to capture attractive investment risk premia by providing transitional, structured growth capital to motivated firms – typically as the sole lender in a capital structure. Our team’s experience in bespoke private-market transactions enables efficiency in execution, while our focus on aligned bilateral investments allows for robust structural controls to be negotiated.

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Differentiated origination

Our collaborative and reputation-based approach, focused on delivering non-concessionary impact, allows for differentiated origination with less competitive tension. With a ‘positive-sum’ mindset that purposefully seeks to deliver more than capital to help achieve climate goals, we believe we are able to attract best-in-class entrepreneurs and create access to bespoke investments with positive convexity.

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Downside protection

This is our priority, and it is underpinned by shorter duration, first-lien, senior-secured positions and conservatively valued assets and collateral analysed in various scenarios. We believe our robust investment process reduces operational and governance risk, and underwriting typically based on visible cash flows allows us to manage performance, technology and merchant risks.

 

Capital preservation represents a portfolio construction goal and cannot be guaranteed.

portfolio managers.

Our Co-Portfolio Managers bring an average of 20 years’ private credit origination and investment experience. We strive to be a valued partner who brings more than just capital to climate-focused businesses. We seek to unlock investor value by engaging companies on ESG alignment and reporting practices that are expected at scale. 

As part of the first global wealth and asset manager to achieve B Corp accreditation, the team harnesses a pioneering a science-based approach to investing in the climate transition and is supported by a 48-strong team of sustainability experts.   

 

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Peter Pulkkinen 
Portfolio Manager

Peter Pulkkinen joined LOIM in February 2021. Before joining LOIM, Peter was Portfolio Manager for the Avenue Sustainable Solutions Fund. Peter has over 20 years of relevant industry experience having held senior roles at leading institutions with direct responsibility for sustainable private debt investments across renewable energy, infrastructure and project and asset backed finance at firms including BNP Paribas, Silverpeak, UBS AG, and Deutsche Bank AG. Peter began his career in private credit at Lehman Brothers. Peter earned a B.A. in Political Science from the University of New Hampshire (1992) and a Masters in International Affairs from The Columbia University School of International and Public Affairs, with a concentration in International Finance/Economics (2004).

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Rhys Marsh
Portfolio Manager 
Rhys Marsh joined LOIM in February 2021. Before joining LOIM, Rhys was Managing Director and head of origination for the Avenue Sustainable Solutions Fund. Rhys has extensive experience in developing sustainable private credit platforms and solutions-based origination, including leading the formation of a renewables and distributed generation project finance lending platform at CIT Group Inc. Previously, Rhys assisted in the investment activities of the credit desk at LibertyView Capital, a Lehman Brothers-owned hedge fund, and began his career at Citigroup focused on corporate lending in the tech, media & telecom sectors.  Rhys earned a B.A. in Political Science, cum laude, from Duke University (2005).

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Adriana Becerra Cid
Sustainability Manager 
Adriana Becerra Cid joined LOIM Sustainable Investment Research Strategy & Stewardship team (SIRSS) in March 2021. Before joining LOIM, Adriana was a Senior Associate in Debt Capital Markets at Santander Bank, where she issued the first sustainable bonds in Latin America. Previously, Adriana was a Business Analyst at McKinsey & Co., and also worked at the Global Climate Finance team at Rocky Mountain Institute. Adriana earned a B.A. in Financial Management from the Instituto Tecnológico Autónomo de México (2014), a Master of Science in Sustainability Management from Columbia University (2021), and has passed the CFA level I.

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important information.

This marketing material is issued by Lombard Odier Funds (Europe) S.A. a Luxembourg based public limited company (SA), having its registered office at 291, route d’Arlon, 1150 Luxembourg, authorised and regulated by the CSSF as a Management Company within the meaning of EU Directive 2009/65/EC, as amended; and within the meaning of the EU Directive 2011/61/EU on Alternative Investment Fund Managers (AIFMD). The purpose of the Management Company is the creation, promotion, administration, management and the marketing of Luxembourg and foreign UCITS, alternative investment funds ("AIFs") and other regulated funds, collective investment vehicles or other investment vehicles, as well as the offering of portfolio management and investment advisory services. The prospective investment manager of the potential investment product outlined herein is Lombard Odier Asset Management (USA) Corp, an investment advisor registered with the US Securities and Exchange Commission. This material is not, nor is it intended to be, marketing material or advertising within the meaning of the Investment Advisers Act of 1940, the rules and guidance of the Securities and Exchange Commission (“SEC”) or the Conduct Rules of the Financial Industry Regulatory Authority (“FINRA”), (iii) is for informational use only by the receiving party for general information purposes only in relation to overall market views.

Lombard Odier Investment Managers (“LOIM”) is a trade name.

This material is provided for informational purposes only and does not constitute an offer or a recommendation to purchase or sell any security or service. It is not intended for distribution, publication, or use in any jurisdiction where such distribution, publication, or use would be unlawful. This document does not contain personalized recommendations or advice and is not intended to substitute any professional advice on investment in financial products. Before entering into any transaction, an investor should consider carefully the suitability of a transaction to his/her particular circumstances and, where necessary, obtain independent professional advice in respect of risks, as well as any legal, regulatory, credit, tax, and accounting consequences. This material is the property of LOIM and is addressed to its recipients exclusively for their personal use. It may not be reproduced (in whole or in part), transmitted, modified, or used for any other purpose without the prior written permission of LOIM.  The contents of this document are intended for persons who are sophisticated investment professionals and who are either authorised or regulated to operate in the financial markets or persons who have been vetted by LOIM  as having the expertise, experience and knowledge of the investment matters set out in this document and in respect of whom LOIM has received an assurance that they are capable of making their own investment decisions and understanding the risks involved in making investments of the type included in this document or other persons that LOIM has expressly confirmed as being appropriate recipients of this document. If you are not a person falling within the above categories you are kindly asked to either return this document to LOIM or to destroy it and are expressly warned that you must not rely upon its contents or have regard to any of the matters set out in this document in relation to investment matters and must not transmit this document to any other person. This document contains the opinions of LOIM, as at the date of issue. The information and analysis contained herein are based on sources believed to be reliable. However, LOIM does not guarantee the timeliness, accuracy, or completeness of the information contained in this document, nor does it accept any liability for any loss or damage resulting from its use. All information and opinions as well as the prices indicated may change without notice. 
This material is intended to outline a strategy which may in the future form the basis of an investment product. The terms of any such product are not finalised and may be subject to change and may differ substantially from the terms set out in this document. Moreover, there is no guarantee that any such product will be created or launched. 
Investing in private credit strategies can involve a high degree of risk. Amongst other things, the viability of private credit investments depends upon the ability of borrowers to repay loans together with interest. Adverse changes to the financial position of a borrower or to the economies in which a borrower may sit may impair the ability of a borrower to pay back some or all of monies borrowed, which could ultimately lead to loses for investors, including in certain circumstances, a loss of the total amounts invested.
Target performance/risk represents a portfolio construction goal based on current interest rate projections, the floating rate may go up or down. It does not represent past performance/risk and may not be representative of actual future performance/risk. Capital protection/Capital preservation represents a portfolio construction goal and cannot be guaranteed.

Important information on ESG results
While any results presented are based on certain assumptions that are believed to reflect actual circumstances, these assumptions may not include all of the variables that may affect, or have affected in the past, the ratings calculations.
The following factors are taken into account in the calculation of the ratings: 
1.         The ESG team uses data issued from a recognised third party provider to establish the severity level of corporate controversies
2.         LOIM has developed its own business rating methodology that integrates data from multiple sources. The scores thus obtained are updated on a weekly basis and represent an assessment of the Environmental, Social and Governance quality of a company. These grades were designed by LOIM's ESG experts and take into account the most relevant extra-financial dimensions applicable to each company’s activity.

Although certain information has been obtained from public sources believed to be reliable, without independent verification, we cannot guarantee its accuracy or the completeness of all information available from public sources.
Views and opinions expressed are for informational purposes only and do not constitute a recommendation by LOIM to buy, sell or hold any security. Views and opinions are current as of the date of this presentation and may be subject to change. They should not be construed as investment advice.

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