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2.1
Prestige Alternative Finance
Alternative Fixed Income Opportunities
Presentation
Institutional Investor Overview
Q1 / 2018
NOTE: INFORMATION CONTAINED WITHIN THIS DOCUMENT IS FOR INVESTMENT PROFESSIONALS FOR INFORMATION PURPOSES ONLY
PRESTIGE ASSET MANAGEMENT LIMITED IS AUTHORISED AND REGULATED BY THE FINANCIAL CONDUCT AUTHORITY (FCA)
PRESTIGE ASSET MANAGEMENT LIMITED IS A MEMBER OF THE ALTERNATIVE INVESTMENT MANAGEMENT ASSOCIATION (AIMA)
PRESTIGE ASSET MANAGEMENT LIMITED IS A MEMBER OF THE CHARTERED INSTITUTE FOR SECURITIES AND INVESTMENT (CISI)
PRESTIGE CAPITAL MANAGEMENT LIMITED IS AUTHORISED AND REGULATED BY THE MALTA FINANCIAL SERVICES AUTHORITY (MFSA)
PRESTIGE CAPITAL MANAGEMENT LIMITED IS A MEMBER OF THE MALTA FUNDS INDUSTRY ASSOCIATION (MFIA)
PRESTIGE FUND MANAGEMENT LIMITED IS REGISTERED WITH THE CAYMAN ISLAND MONETARY AUTHORITY (CIMA)
SELECTED FUNDS ARE REGISTERED WITH THE MONETARY AUTHORITY OF SINGAPORE (MAS)
SELECTED FUNDS ARE REGISTERED WITH THE MALTA FINANCIAL SERVICES AUTHORITY (MFSA)
SELECTED FUNDS ARE REGISTERED WITH THE COMMISSION DE SURVEILLANCE DU SECTEUR FINANCIER (CSSF)
2
Contacting us
Authorised and regulated by the Financial Conduct Authority (FCA)
Member of the Alternative Investment Management Association (AIMA)
Member of the Chartered Institute for Securities and Investment (CISI)
Company Registration Number: 6 2 7 7 5 3 0
VAT Registration Number: 9 2 8 7 8 6 2 6 8
FCA Registration Number: 4 8 6 2 3 9
INSTITUTIONAL MARKETING & ADMINISTRATION SERVICES
Prestige Asset Management Limited
Marketing Office: 33 St. James’s Square, London, SW1Y 4JS, United Kingdom
Registered Office: 36 Spital Square, London, E1 6DY, United Kingdom
T: +44 (0) 203 178 4055
F: +44 (0) 203 004 9690
E: (Admin) admin@prestigeassetmanagement.co.uk
E: (Marketing) info@prestigefunds.com
www.prestigeassetmanagement.co.uk
www.prestigefunds.com
3
Contents
Page
Mission ………………………………………………………………...……………. 6
Executive Summary ……………………………………………………………….. 7
Fund Characteristics ………..…..…………………………………………………. 9
High Cost Lending is less attractive to Banks ………………………………….. 10
Finance Areas ……………………………………………………………………… 11
Assets Financed …………………………………………………………………… 13
Lending Origination ……………………………………………………………….. 14
Lending Client Base ………………………………………………………………. 15
Lending Evaluation - Approval Process ………………………….……………… 17
Lending Criteria ……………………………………………………………………. 19
Lending Security, Collateral & Control …………………………………………… 20
Lending Agreements ………………………………………………………………. 21
Risk Control ………………………………………………………………………… 22
Risk Control - Ongoing Monitoring ………………………………………………. 23
Risk Control - Governance & Oversight ……………………………………….… 24
Risk Control - Liquidity ………………………………………………………….…. 26
Risk Control - Portfolio Asset Allocation …………………………………….…… 27
Portfolio - Snapshot …………………………………………………………….….. 28
Conclusion …………………………………………………………………….……. 30
4
Contents
Page
Market Correlations ………………………..……………………………….….… 31
Risk Vs Reward.…………………………………………………………….……. 32
Summary of Terms ……………………………………………………….……… 33
Operational Flow …………………………………………………………....…… 34
APPENDIX 1: Prestige
Building on Success ………………………………..……………………..…….. 35
Clients ……………………………………………………………………….……. 36
Regulatory Institutions & Industry Associations ………….…………….…….. 37
Prestige Companies ……………………………………………………….……. 38
Prestige Asset Management ………………………………………………...…. 39
Prestige Capital Management ……………………………………..……….….. 40
Prestige Fund Management ……………….……………………………….…... 41
People ……………………………………………………………………….……. 42
APPENDIX 2: UK / SME Lending Overview ……..…..……………….……… 47
APPENDIX 3: Industry Overview ……………… ……………………………... 58
APPENDIX 4: Market Overview …………………………………...………….. 59
APPENDIX 5: Additional Background Research …………………………….. 60
International Fund Reference Codes …………………………………….......... 61
Legal Disclaimer & Risk Warning ………………………………………….…… 62
International Institutional Distribution ……………………………………….…. 63
5
Mission
To provide investors with a genuine
alternative inflation hedge in an increasingly
uncertain and volatile world.
6
▪ Alternative investment strategy with Capital Appreciation and Income options
▪ Access to the profitable institutional asset-based direct lending
▪ Established: diversified investment portfolio consisting of short and medium term,
high yielding loan and leasing assets
▪ Established: professional fund management team
▪ Established: professional specialist finance arranging team
▪ Non-correlated to traditional asset classes such as equities and bonds
▪ Consistent absolute returns in most market conditions
▪ Investment strategy ‘capacity’ remains limited
Niche Asset Class > which we believe is essential as part of a diversified
investment portfolio in a low growth, low interest rate environment.
NOTE: Past performance is not a guide to future performance and investments can go down as well as up.
7
Prestige Alternative Finance
Executive Summary
▪ The Fund targets annual net returns of 6-7% with annual volatility of below 1%
▪ The Fund inception is 01/2009 and its strategy is Asset Based - Direct Lending in the UK with a focus on farming, agricultural and food related industries
▪ The Fund has approximately USD 675mn assets under management and is used by approximately 300 investor groups globally
▪ Prestige Alternative Finance (‘Fund’) is managed by Prestige Fund Management and affiliated companies (“Prestige”)
▪ Prestige was founded in 2007 and specialises in alternative investments
▪ Prestige team consists of over 100 people in regulated operations in the UK and in several international financial centres
▪ Prestige has raised approximately USD 1.5bn since 2008
8
NOTE: As at 01/2018. All figures are approximate and subject to change without notice.
SOURCE: Prestige Fund Management Limited
Prestige Alternative Finance
Executive Summary
Investment Objectives
▪ Steady, long term capital growth of 6-7% p.a.
▪ Low volatility (< 1% p.a.)
▪ Uncorrelated returns to traditional and alternative investments
▪ Commensurate liquidity to investors
Through selected investments in:
▪ Loans (finance agreements, lease and hire purchase contracts) which are secured against assets
▪ Strong diversification in terms of counterparties, sectors and types of assets financed
▪ A focus on agricultural, horticultural, rural small business related sectors many of which have historically operated with lower defaults
Since its launch in 2009 the Fund has not experienced a negative year
9
NOTE: As at 01/2018. Past performance is not a guide to future performance and investments can go down as well as up.
SOURCE: Prestige Fund Management Limited
Prestige Alternative Finance
Characteristics
Asset Based - Direct Lending
High cost lending is less attractive to Banks
▪ Inefficient market: Each loan approval typically involves a personal site visit to the client
▪ Specialist market: Non-Commoditised areas of lending
▪ Relationship driven market:
- High barriers to entry - not an attractive growth market for large new players
- Few remaining large / active lending players in the market
- Frequent - repeat customer business activity / referrals and follow on business
▪ Relatively small specialist leading markets - approximately GBP 3bn / USD 4bn p.a.
(of which approximately USD 1.5bn is controlled by manufacturer finance)
▪ Much of the lending activity is focused around the strategic financing of one or several assets
which generates a specific productivity gain, or specific cost saving
▪ Loan customers are less sensitive to rates - more focused on long term client service and the
“monthly cost” of servicing the loan
▪ Increasing security / collateral base - personal guarantees / asset debentures encourages
repeat business
NOTE: As at 01/2018. All figures are approximate and subject to change without notice.
SOURCE: Prestige Fund Management Limited10
The Fund operates a diversified investment portfolio of asset based loans and leases
which are secured typically against a diverse range of assets. The Fund focuses on two
core areas of lending activity:
Asset Finance (‘specialist equipment, machinery, vehicles’)
Loan ‘collateral’ is typically tied to specialist machinery,
equipment, vehicles.
Project Finance (‘waste to heat’, ‘waste to energy’, ‘on-farm energy’)
Loan ‘collateral’ is typically tied to land, buildings and/or
inventory, accounts receivable, personal guarantees
and debentures over bank accounts.
11NOTE: As at 01/2018. All figures are approximate and subject to change without notice.
SOURCE: Prestige Fund Management Limited
Investment Process
Finance Areas
12
Investment Process
Finance Areas
NOTE: Examples are subject to change or addition without notice.
SOURCE: Prestige Fund Management LimitedNOTE: Examples are subject to change or addition without notice.
SOURCE: Prestige Fund Management Limited / * Office of National Statistics (ONS)
There are approximately 5.4mn* small companies in the UK. We help rural small
business ‘finance in’ productivity and ‘finance out’ fixed costs
Approximate values of typical individual assets financed / leased:
Project / Finance
▪ Biogas - AD Plant / installation GBP 2-20mn / USD 2.6-26mn
▪ Large Solar Panel / installation GBP 1-2mn / USD 1.3-2.6mn
▪ Wind Turbine / installation GBP 0.5-1mn / USD 0.65-1.3mn
Assets / Finance
▪ Seed Driller GBP 10k / USD 13.2k
▪ Crop Sprayer GBP 15k / USD 19.8k
▪ Trailer GBP 20k / USD 26.3k
▪ Mower GBP 30-40k / USD 40-53k
▪ 4 Wheel Drive GBP 30-70k / USD 40-92k
▪ Baler GBP 40-60k / USD 53-79k
▪ Small Solar Panel / installation GBP 40-60k / USD 53-79k
▪ Tractor GBP 50-100k / USD 66-132k
▪ Small Wind Turbine / installation GBP 50-60k / USD 66-79k
▪ Telehandler / Lifters GBP 50k / USD 66k
▪ Excavators & Bulldozers GBP 80-100k / USD 105-132k
▪ Loading Shovels GBP 100k / USD 132k
▪ Biomass Boiler GBP 100k / USD 132k
▪ Potato Harvester GBP 100-200k / USD 132-263k
▪ Combine Harvester GBP 200-300k / USD 263-395k
▪ Large Wind Turbine GBP 250k / USD 330k
▪ Livestock processing machinery GBP 250-500k / USD 330-658k
▪ Pasturisation / Sterilisation machinery GBP 400k / USD 527k
13
Investment Process
Assets Financed
NOTE: As at 01/2018. All figures are approximate and subject to change without notice. Assets and Projects listed above are examples only and not exclusive.
SOURCE: Prestige Fund Management Limited
14
Investment Process
Lending Origination
NOTE: As at 01/2018. All figures are approximate and subject to change without notice.
SOURCE: Prestige Fund Management Limited
Since inception of the Fund, its main counterparty (Finance Arranger) has expanded both in
terms of the number, size and complexity of transactions it conducts and also the number
of staff and retained consultant expertise it operates with to source and administer them.
Since 2001 our Finance Arranger has been responsible for arranging over 15,000
loans to more than 6,000 borrowers - totalling approximately GBP 1bn / USD 1.3bn
The lending ‘origination’ process is labour-intensive and relationship-driven. The Fund
contracts with a specialist UK based Finance Arranger established in 2001 with an
experienced direct lending team of approximately 40 people.
The customer base is often agricultural / farming / food production with a strong focus on
providing finance to modernise small businesses and make efficiency / productivity gains
▪ Sources of new customer deal flow originate from an increasingly wide range including
land owners:- with an average of 500 acres
- owning a house worth in excess of GBP 500,000 / USD 650,000
- a typical Net Asset Value in the order of GBP 2mn / USD 2.5mn
▪ Approximately two thirds of the customers are land / property owners running family
businesses and small limited companies. The balance of the customer base is often
specialist contractors to the UK agricultural, farming and food industry sectors
▪ May have a relatively conservative balance sheet
▪ May have an operating overdraft facility with a bank
▪ May own a number of agricultural machines
▪ May have a low debt approach to financing
▪ May operate several businesses and are looking for ways to diversify their income and
make productivity gains
15
Investment Process
Lending Client Base
NOTE: As at 01/2018. All figures, terms and conditions are approximate and subject to change without notice.
SOURCE: Prestige Fund Management Limited
Over 1,000 bank branches closed between 2015 and 2016. Access to
credit and the speed of new loan approvals have not recovered from 2007
ARTICLE OF INTEREST: http://www.bbc.com/news/business-38302564
16NOTE: As at 01/2018. All figures are approximate and subject to change without notice.
SOURCE: Prestige Fund Management Limited
Investment Process
Lending Client Base
17
Investment Process
Lending Evaluation - Approval Process
NOTE: As at 01/2018. All figures, terms and conditions are approximate and subject to change without notice.
SOURCE: Prestige Fund Management Limited
Investment Manager - Investment Committee
Lending Criteria / Acceptable - Risk - Assets - Areas - Customers
Finance Arranger - Credit Committee
Individual Loan Origination / Loan Customer Approval
Investment Manager - Investment Committee
Individual Loan Approval
A multi level loan filtering, profiling and evaluation process
18
Investment Process
Lending Evaluation - Approval Process
NOTE: As at 01/2018. All figures, terms and conditions are approximate and subject to change without notice.
SOURCE: Prestige Fund Management Limited / * Office of National Statistics (ONS)
Systems and Technology used
▪ Sentinel - loan management system
▪ Equifax and Experian - credit reference data
▪ Credit Safe - credit reference data
▪ Invu document management
▪ HPI - vehicle reference data
▪ Microsoft Office 360 / Cloud
▪ Smart Sheets
▪ Salesforce
▪ UK government ‘Land Registry’ - data alerts
▪ UK government ‘Companies House’ - data alerts
▪ Google - data alerts
▪ Client interest and capital payments are made by Bank ‘Direct Debit’ or ‘Standing Order’
With approximately 5.4 million* small businesses in the UK, there is an increasing
amount of data available for use in our screening / origination processes
Quantitative
▪ Minimum of 3 years audited and published
accounts
▪ Verified credit references
▪ Partner or Director personal credit searches
through ‘Experian’ credit data vendor group
▪ Company credit searches through ‘Experian’
and or ‘Creditsafe’ credit data vendor groups
▪ Experian rating above 60/100 for businesses
and above 600/1200 for individuals
▪ Cash deposits of 10-30% or a trade-in
machine equivalent
Qualitative
▪ Loan - size
▪ Loan - duration
▪ Loan type - (invoice, cashflow, secured loan,
asset finance etc.)
▪ Loan to value (% deposit)
▪ Customer - credit rating
▪ Customer - type (corporate)
▪ Customer - sector
▪ Customer - size
▪ Customer - payment history
▪ Customer - location
▪ Customer - relationship (existing / new?)
▪ Personal guarantee - secured on other assets
(land, property, buildings, shares etc.)
19
Investment Process
Lending Criteria
NOTE: As at 01/2018. All figures, terms and conditions are approximate and subject to change without notice.
SOURCE: Prestige Fund Management Limited
Asset Finance
▪ Cash deposit
▪ Ownership of the asset until maturity
▪ Personal Guarantee (on larger transactions)
Project Finance
▪ Personal Guarantees from company owners /
directors (on larger transactions)
▪ Debenture over company bank account
▪ Partial ownership of the asset until loan maturity
(in some cases)
▪ UK / Land
▪ UK / Buildings
▪ Government ‘feed in tariffs’ (FiTs)
▪ Operational ‘step in rights’
▪ Company share pledge
▪ Other ‘un-encumbered’ assets
20
Investment Process
Lending Security, Collateral & Control
NOTE: As at 01/2018. All figures, terms and conditions are approximate and subject to change without notice.
SOURCE: Prestige Fund Management Limited
Increasing levels of borrower security often come in the form of:
Investment Process
Lending Agreements
▪ Secured Loans
▪ Hire Purchase (Regulated + Unregulated)
▪ Lease Purchase (Regulated + Unregulated)
▪ Finance Lease (Regulated + Unregulated)
▪ Operating Lease
Unregulated Agreements are entered into with corporate bodies and partnerships with 4 or more partners and other considerations, such as value of loan etc.
Regulated Agreements are entered into with customers who are “unincorporated bodies” (individuals, sole trader or partnerships (with less than 4 partners))
Project Finance may include up to 20 individual ‘bespoke’ finance agreements - helping to safeguard and regulate different parts of the funding activity and supporting collateral as well as control of the rights and behaviour of the underlying borrower
NOTE: As at 01/2018. All figures are approximate and subject to change without notice.
SOURCE: Prestige Fund Management Limited21
▪ Strong Origination Process - Finance Arranger Credit Committee
- Fund Investment Committee
▪ Diversified investment loan portfolio - approximately 400 loan customers
- approximately 600 loans
▪ Lending structure often requires financed assets to remain in ownership of the lender
until the final payment
▪ Strong loan management and monitoring process
▪ Passive loan monitoring - desktop analysis / alerts
▪ Active loan monitoring - on site physical meetings
▪ Borrowers may pledge additional personal assets such as land and buildings
▪ Debentures may be taken over borrower bank accounts and other assets
▪ Cash deposits are often taken from borrowers
22
Investment Process
Risk Control
NOTE: As at 01/2018. All figures are approximate and subject to change without notice.
SOURCE: Prestige Fund Management Limited
Investment Process
Risk Control - Ongoing Monitoring
NOTE: As at 01/2018. All figures are approximate and subject to change without notice.
SOURCE: Prestige Fund Management Limited23
Passive Monitoring
Finance Arranger - Desktop Analysis - All loan customers
Investment Manager - Top 50 loan customers
Active Monitoring
Finance Arranger - Site / Field Visits - multiple times a year - Top 25 loan customers
Investment Manager - Top 10 loan customers
Real Time Monitoring
Finance Arranger - Desktop Analysis - Top 25 loan waste to energy / on-farm energy
Investment Manager - Desktop Analysis - Review of dashboard hub
A multi level loan / customer on-going monitoring process
▪ Borrower balance sheet and cash flow statements will typically be analysed quarterly
▪ Borrower audited financial statements will typically be analysed annually
▪ Fund - Board includes Directors who are individually approved by various international
regulatory and professional trade bodies including:
- Financial Conduct Authority (FCA) - United Kingdom
- Malta Financial Services Authority (MFSA) - Republic of Malta
- Swiss Financial Market Supervisory Authority (FINMA) - Switzerland
- Cayman Island Monetary Authority (CIMA) - Cayman
- Commission de Surveillance du Secteur Financier (CSSF) - Luxembourg
▪ Fund - Board (and its special purpose vehicles) includes 2 experienced / professional
independent Directors
▪ Fund - independently audited (on site) - annually by one of the world’s largest audit firms
▪ Fund - independently administered - monthly by one of the world’s largest banking
groups
▪ Fund - operates with no loans to directors, employees and or shareholders of Prestige
and / or affiliated companies (except to SPVs operated by the dedicated Finance
Arranger)
24
Investment Process
Risk Control - Governance & Oversight
NOTE: As at 01/2018. All figures are approximate and subject to change without notice.
SOURCE: Prestige Fund Management Limited
▪ Fund - operates with no ‘leverage’
▪ Fund - operates with no ‘derivatives’ (except forward contracts FX share class hedging)
▪ Fund - operates with no elaborate ‘mark to model’ / ‘future income’ valuation methodology
▪ Fund - operates with no ‘exotic financial engineering’
▪ Investment Manager - team includes 2x FCA (UK) / MFSA (Malta) / CSSF (Luxembourg)
approved Directors
▪ Investment Manager - team includes a former Barclays Bank - Commercial Lending Officer
▪ Investment Manager - team includes a former Chemical Bank (JP Morgan) - banker
▪ Investment Manager - team includes a former Deloitte - auditor
▪ Investment Manager - operates a monthly ‘Investment Committee’
▪ Investment Manager - operates various regular internal administration, risk, operational
teams / meetings
▪ Investment Manager - publishes significant / detailed portfolio analysis report (typically
monthly) of Fund’s investment loan portfolio
▪ Investment Manager - retains a seat on the board of the Finance Arranger and operates /
attends board meetings (typically quarterly)
▪ Members of the Investment Manager personally visit larger loan clients in addition to the
‘Finance Arranger’
25
Investment Process
Risk Control - Governance & Oversight
NOTE: As at 01/2018. All figures are approximate and subject to change without notice.
SOURCE: Prestige Fund Management Limited
▪ Loan portfolio - interest of approximately 10% p.a.
▪ Loan portfolio - return of capital of approximately 20% p.a.
▪ Loan portfolio - early repayment of up to 20% p.a.
▪ Fund - cash buffer @ 10-15% NAV
▪ Fund - borrowing / overdraft credit facility
▪ Fund’s main counterparty (Finance Arranger) and / or some of its other
counterparty lenders also have borrowing / overdraft credit facilities
▪ Ability to sell loans internally to other Prestige Funds / Managed Debt Pools
▪ Ability to sell loans externally
26
Investment Process
Risk Control - Liquidity
NOTE: As at 01/2018. All figures, terms and conditions are approximate and subject to change without notice.
SOURCE: Prestige Fund Management Limited
27
Investment Process
Risk Control - Portfolio Asset Allocation
NOTE: As at 01/2018. All figures, terms and conditions are approximate and subject to change without notice.
SOURCE: Prestige Fund Management Limited
▪ Portfolio - Ongoing qualitative and quantitative asset risk screening process
▪ Portfolio - Limit exposure to any single loan
▪ Portfolio - Limit exposure to any single loan customer
▪ Portfolio - Limit exposure to any single loan sector
▪ Portfolio - Limit exposure to import and export type customers
▪ Portfolio - Analysis of level and variability of historic defaults / impairments
▪ Portfolio - Loan to Value (LTV) limits and limits on non-secured lending
▪ Portfolio - Maintains strong client / sector diversification
Fund Investment Portfolio - Lending Statistics
▪ Minimum lending period 1 year
▪ Maximum lending period 7 years
▪ Target lending period 3-4 years Project Finance
4-5 years Asset Finance
▪ Average loan to asset value 70-80% Project Finance
60-80% Asset Finance
▪ Average value of finance provided GBP 250k / USD 300k
▪ Total # loans 400
▪ Total # of clients 242
▪ Average maturity 69 months (assuming all loans run full term)
▪ Largest client as % NAV 11.20% Project Finance
▪ 0.23% Asset Finance
▪ Largest loan as % NAV 10.79% Project Finance
0.16% Asset Finance
▪ Average loan as % NAV 0.83% Project Finance
0.82% Asset Finance
28
Investment Process
Portfolio - Snapshot
NOTE: As at 01/2018. All figures are approximate and subject to change without notice.
SOURCE: Prestige Fund Management Limited
29
Investment Process
Portfolio - Snapshot
NOTE: As at 01/2018. All figures, terms and conditions are approximate and subject to change without notice.
SOURCE: Prestige Fund Management Limited
Loans Sectors %Loan Agreement Types %
Asset Allocation
Fund Investment Portfolio - Project Finance:
Hire Purchase19%
Lease / Purchase18%
Finance / Lease63%
Operating / Lease0%
Renewable Energy (Agri/Food)31%
Land & Buildings14%
Machinery & Equipment23%
Vehicles (Tractors, Materials Handlers, Loaders)
12%
Vehicles (4x4, Cars, Vans, Trucks up to 3.5 tonnes)
7%
Vehicles (Heavy Goods & Trailers)
5%
Other/Misc.7%
Livestock1%
▪ Access to an established institutional asset-based direct lending team and a diversified
managed pool of high yielding loans and leasing assets
▪ Generating consistent, absolute returns with low volatility in various market conditions
▪ Low correlation to traditional assets classes such as equities and bonds
▪ Managed by an experienced team with a strong history in loan origination, credit
scoring, and loan portfolio management
▪ UK farming / agricultural / food related industries are often conservative asset rich,
cash poor and under invested - in need of modernisation and productivity gains
30
Prestige Alternative Finance
Conclusion
NOTE: As at 01/2018. Past performance is no guide to future performance and investments can go down as well as up.
Participating I-Share results prior to 05/2014 are a composite proforma based upon actual results of Participating Shares with certain fees rebated.
SOURCE: Prestige Fund Management Limited
TOTAL 75.00% 21.55% 4.29% 80.05%
5 YEAR 31.48% 8.68% 2.08% 38.01%
3 YEAR 16.64% 3.85% 1.11% 19.17%
1 YEAR 4.49% 1.50% 0.28% 14.81%
Net
of fees
GBP
PALTF
UK
10 Year
Treasury
Index
UK
Bank
Rate
MSCI
World
Index
Prestige Alternative Finance
Market Correlations
31
NOTE: As at 01/2018. Past performance is no guide to future performance and investments can go down as well as up.
Participating I-Share results prior to 05/2014 are a composite proforma based upon actual results of Participating Shares with certain fees rebated.
SOURCE: Prestige Fund Management Limited
MSCI
World
Index
USD
0.29 0.02 0.03
UK
10 Year
Treasury Index
GBP
-0.22 0.35 0.05
Prestige
Alternative
Finance
USD
0.02 0.07 0.14
Commercial
Finance
Opportunities
USD
0.03 0.09 0.14
CORRELATION
11/2013 - 01/2018
MSCI
World
Index
USD
UK
10 Year
Treasury Index
GBP
Prestige
Alternative
Finance
USD
Commercial
Finance
Opportunities
USD
Prestige Alternative Finance
Risk Vs Reward
32
NOTE: As at 01/2018. Past performance is no guide to future performance and investments can go down as well as up.
Participating I-Share results prior to 05/2014 are a composite proforma based upon actual results of Participating Shares with certain fees rebated.
SOURCE: Prestige Fund Management Limited
MSCIWorldIndex
11/2011 - 01/2018
Alternative Finance
04/2009 - 01/2018
S&P500Index
11/2011 - 01/2018
Commercial Finance Opportunities
11/2011 - 01/2018
0%
2%
4%
6%
8%
10%
12%
0% 2% 4% 6% 8% 10% 12%
An
nu
alised
Retu
rns %
Annualised Volatility %
Prestige Funds - Return Vs. Risk Comparison
FUND: Prestige Alternative Finance Fund Limited
DOMICILE: Cayman
STRUCUTURE: Limited Liability Mutual Fund Company (Open Ended)
REGULATOR: Cayman Island Monetary Authority (CIMA)
INVESTMENT STRATEGY: UK / Asset Based - Direct Lending
INVESTMENT MANAGER: Prestige Fund Management Limited
FUND ADMINISTRATION: Prestige Asset Management Limited
FUND DISTRIBUTOR: Prestige Asset Distribution Limited
FUND DISTRIBUTOR: OpenFunds Investment Services AG
FUND ADMINISTRATOR: MUFG Fund Services (Ireland) Limited
FUND CUSTODIAN & BANK: Butterfield Trust
FUND AUDITOR: Deloitte
SHARE CLASSES: Participating I-Shares (Accumulation)
Participating ID-Shares (Income)
CURRENCIES: GBP / USD / EUR / CHF / SEK / JPY
MINIMUM SUBSCRIPTION: USD 1mn (or currency equivalent)
SUBCRIPTIONS: Monthly
REDEMPTIONS: Monthly, on 60 days notice (I-Shares)
Monthly, on 90 days notice (ID-Shares)
subject to conditions of the Information Memorandum
FEES: Management: 1.25% p.a. (I-Shares)
1.50% p.a. (ID-Shares)
Performance: 0%
Initial: 0%
33
Prestige Alternative Finance
Summary of Terms
NOTE: Currency share class subscriptions should observe the equivalent USD base currency regulatory minimum in order to be accepted.
Please see the Information Memorandum for full terms and conditions.
SOURCE: Prestige Fund Management Limited. Subject to change without notice.34
Prestige Alternative Finance
Operational Flow
Board of Directors
(Quarterly Meetings)
Credit Committee
(Weekly Meetings)
SPECIAL PURPOSE VEHICLE
Privilege Asset Finance
(United Kingdom)
SPECIAL PURPOSE VEHICLE
Privilege Project Finance
(United Kingdom)
Operations Team
Finance / Loan
Customer
Board of Directors
SPECIAL PURPOSE VEHICLE
Prestige Luxco 1+2
(Luxembourg)
F I N A N C E A R R A N G E R
Privilege Holdings
(United Kingdom)
Finance / Loan
Customer
On-Site Monitoring Team
Finance Arranger
(Weekly Meetings)
Investment Committee
(Monthly Meetings)
Sub Committee
(Bi-Weekly Meetings)
Administration Team
(Weekly Meetings)
Operations Team
(Weekly Meetings)
Lease / Loan
Customer
Lease / Loan
Customer
Lease / Loan
Customer
Finance / Loan
Customer
I N V E S T M E N T M A N A G E R
Prestige Fund Management
(Cayman)
F U N D
Prestige Alternative Finance
(Cayman)
Board of Directors
(Quarterly / Annual Meetings)
On-Site Monitoring Team
Larger Loan Customers
APPENDIX 1: Prestige
Building on success
35
Prestige Alternative Finance Fund Limited
Assets Under Management (USD) Growth 01/2012 - 01/2018
Prestige Alternative Finance Fund Limited
Cumulative USD Fund Price / Growth 01/2012 - 01/2018
A Successful track record in Fund-based lending
Established in 2007, Prestige consists of several companies under common ownership and control with operations in the UK,
Malta, Luxembourg and Cayman and during that time has raised over USD 1.5bn with a focus on private debt / credit related
fund based, alternative investment strategies.
Since 2009, Prestige Alternative Finance Fund has grown to over GBP 500ml / USD 675ml, with approximately +4,000
registered investors, advised by almost 300 financial advisory groups.
The Fund operates a diversified investment portfolio consisting of asset based loans and leases in both project finance and
asset finance sectors with a strong focus on agricultural, food and farming related of small business customers. The
investment portfolio includes lending and finance opportunities on specific transactions and or assets held in dedicated ring
fenced special purpose vehicles (SPVs). The lending origination and ongoing servicing is conducted by an established,
specialist, independent Finance Arranger (owned by Prestige).
NOTE: As at 01/2018. Past performance is no guide to future performance and investments can go down as well as up.
Participating I-Share results prior to 05/2014 are a composite proforma based upon actual results of Participating Shares with certain fees rebated.
SOURCE: Prestige Fund Management Limited
2,000,000
102,000,000
202,000,000
302,000,000
402,000,000
502,000,000
602,000,000
702,000,000
802,000,000
AU
M U
SD
100
110
120
130
140
150
160
170
180
Cum
ulai
tve P
erfo
rman
ce (
USD
Shar
e)
APPENDIX 1: Prestige
Clients
Our diversified client / investor base includes:
International Institutional Investors
▪ Banks
▪ Corporations
▪ Insurance companies
▪ Pension funds
▪ Public entities and authorities
▪ Registered charities
International Professional Advisors
▪ Alternative investments third party marketers
▪ Asset managers
▪ Discretionary investment advisors
▪ Discretionary investment trusts
▪ Distribution networks for financial products
▪ Family offices
▪ Hedge fund managers
▪ Private banks
36
Prestige Asset Distribution
Gross Assets Raised - Highlights
2011 USD 97mn
2012 USD 184mn
2013 USD 195mn
2014 USD 207mn
2015 USD 205mn
2016 USD 273mn
2017 USD 258mn
01/2008 - 12/2017 USD 1.6bn
NOTE: All figures are approximate and subject to change without notice.
SOURCE: Prestige Asset Distribution Limited
37
Prestige Alternative Finance Fund Limited is registered with the Cayman Islands Monetary Authority (CIMA)
www.cimoney.com.ky
Prestige Alternative Finance Fund Limited is registered with the Monetary Authority of Singapore (MAS)
www.mas.gov.sg
Prestige Fund Management Limited is registered with the Cayman Islands Monetary Authority (CIMA)
www.cimoney.com.ky
Prestige Asset Management Limited is authorised and regulated in UK by Financial Conduct Authority (FCA)
www.fca.org.uk
Prestige Asset Management Limited is a member of the Alternative Investment Management Association (AIMA)
www.aima.org
Prestige Asset Management Limited is a member of the Chartered Institute for Securities & Investment (CISI)
www.cisi.org
Butterfield Trust (Bermuda) Limited is regulated by the Bermuda Monetary Authority (BMA)
www.bma.bm
Charterhouse Law is regulated in the UK by the Solicitors Regulation Authority (SRA)
www.sra.org.uk
APPENDIX 1: Prestige
Regulatory Institutions & Industry Associations
38
The Prestige team consists of over 100 people in regulated operations
in the UK and in several international financial centres
APPENDIX 1: Prestige
Companies & Joint Ventures
APPENDIX 1: Prestige
Prestige Asset Management
39
www.prestigeassetmanagement.co.uk
www.fca.org.uk
Established in 2007, Prestige Asset Management Limited is a UK-based administration and
marketing company regulated by the Financial Conduct Authority (FCA) and is entirely
privately owned by its senior management. The company specialises in providing
investment administration and marketing support services to international fund managers,
wealth managers, asset managers, financial advisors and financial intermediaries.
Prestige Asset Management Limited is authorised and regulated by the
Financial Conduct Authority (FCA) (No: 486239) and is a member of the
Alternative Investment Management Association (AIMA) and the
Chartered Institute for Securities and Investment (CISI).
APPENDIX 1: Prestige
Prestige Capital Management
40
www.prestigecapitalmanagement.com.mt
www.mfsa.com.mt
Established in 2011, Prestige Capital Management Limited is a Malta-based investment
management company regulated by the Malta Financial Services Authority (MFSA) and is
entirely privately owned by its senior management. The company specialises in
international alternative investments with a focus on absolute return, actively managed
strategies and is responsible for the management and operation of several European-
domiciled investment funds.
Prestige Capital Management Limited authorised and regulated by the
Malta Financial Services Authority (MFSA) and is a member of the Malta
Funds Industry Association (MFIA). Prestige Capital Limited operates with
full scope Alternative Investment Fund Managers Directive (AIFMD).
APPENDIX 1: Prestige
Prestige Fund Management
41
www.prestigefundmanagement.ky
www.cimoney.com.ky
Established in 2009, Prestige Fund Management Limited is a Cayman based Fund
Management company registered with the Cayman Island Monetary Authority (CIMA) and
is entirely privately owned by its senior management. The company specialises in
international alternative investments with a focus on absolute return, actively managed
strategies and is responsible for the management and operation of several investment
funds.
Prestige Fund Management Limited is registered with the Cayman Islands
Monetary Authority (CIMA).
42
APPENDIX 1: Prestige
People
Craig Reeves (UK)
Board Director & Founder:
Prestige Capital Management / Prestige Fund Management / Prestige Asset
Distribution / Prestige International Marketing Services and various Prestige
Funds
Associated with Prestige since 2007
Craig is a Director and Founder of Prestige Capital Management Limited, Prestige Fund Management Limited, Prestige Asset Distribution
Limited and Prestige International Marketing Services Limited and is a Board Director of various international Prestige Funds. Mr Reeves is
also a Director of Nucleus Holdings Limited and is a co-founder and non-executive director of OpenFunds Investment Services AG.
Formerly Managing Director and co-founder of Platinum Capital Management Limited (an international asset management group). Formerly
Head of Portfolio Management and Asset Allocation at Titan Capital Management Limited (an international asset management group). Prior
experience as a Proprietary Trader at Gaiacorp Trading Limited (an international asset management group), Proprietary Trader at London
Currency Exchange Limited (a private client / proprietary trading house) and an internship at Bank of America (London). Mr Reeves has also
previously provided retained consultancy services to a large London-based international family office, a large London-based international
stock broker, a London-based pension consulting group and a London-based international real estate investment group.
He has nearly 25 years of experience in financial services as a professional investment manager, trader and investor of alternative
investments, hedge funds, capital markets and real estate and has written several articles for various financial publications journals including
the AIMA Journal. He has served as a Board Director on over 20 international Funds. Mr Reeves graduated with a BA (Hons) in Business
Administration from Huddersfield University and a Higher National Diploma in Business and Finance from University of Greenwich (London).
He also attended the New York Institute of Finance (NYIF) where he studied various financial markets and derivative trading courses and is
also a member of the Chartered Institute for Securities and Investment (CISI).
Approved in Malta by the Malta Financial Services Authority (MFSA), approved in Switzerland by the Swiss Financial Market Supervisory
Authority (FINMA), in Luxembourg by the Commission de Surveillance du Secteur Financier (CSSF) and approved in the UK by the Financial
Conduct Authority (FCA) and is registered with the Cayman Island Monetary Authority (CIMA).
43
APPENDIX 1: Prestige
People
Deborah Hardy (UK)
Board Director: Chief Operating Officer
Prestige Asset Management
Associated with Prestige since 2007
Ms Hardy is an Executive Director, Chief Operating Officer and shareholder of Prestige Asset Management Limited
and is an Executive Director of Privilege Holdings Limited.
Ms Hardy has over 20 years’ experience in business administration, process management and development,
delivering a wide range of both client and supplier focused solutions. Ms Hardy was formerly Director of Client
Services at an international asset management group with approximately USD$1 billion under management. She
has also held several operational and management roles within supply chain and contract management at Gardline
Marine Sciences (the world’s largest independently-owned marine survey company), Aviva plc, the largest UK
insurance company and the Rotch Property Group.
Approved in the UK by the Financial Conduct Authority (FCA).
44
APPENDIX 1: Prestige
People
Robert McGregor (UK)
Board Director: Prestige Capital Management / Prestige Fund Management / Prime
Holdings and various Prestige Funds
Associated with Prestige since 2008
Robert is a director of Prestige Capital Management Limited, Prestige Fund Management Limited and Prime
Holdings Limited and a director of various Prestige Funds.
His early background was in financial services as a financial markets trader in London running large proprietary
trading books at Bankers Trust (an investment bank), Chemical Bank (an investment bank) and Royal Trust Bank
(an investment bank). In 1994 he became a founder member and director of London based City Fund Management
Limited (an investment manager), where his primary responsibilities were for operations and risk management. In
2005 he relocated to Grand Cayman and set up City Fund Management (Cayman) Limited (a risk management
consultancy) that supported investment management companies in London, Cayman and the Bahamas. In 2011 he
relocated to Malta to help establish Prestige Capital Management Limited, and is now based in the UK.
Approved in Malta by the Malta Financial Services Authority (MFSA), in the UK by the Financial Conduct Authority
(FCA) and in Luxembourg by the Commission de Surveillance du Secteur Financier (CSSF) and is registered with
the Cayman Island Monetary Authority (CIMA).
45
APPENDIX 1: Prestige
People
Philip Gerrard (UK)Board Director: Chief Executive Officer
Privilege Finance
Associated with Privilege since 2015
Mr Gerrard serves as the Chief Executive Officer of Privilege Holdings Limited and its various operating subsidiaries
including Privilege Asset Finance Limited and Privilege Project Finance Limited.
Prior to joining the board of Privilege Holdings Limited, he was Head of Grant Thornton European Financial Leasing
Advisory Services. Formerly Interim C.E.O. at European Leasing Financial Services. Formerly Managing Director at
Elmfield U.K. Limited, a private Healthcare business. Formerly Operations Director at Royal Bank of Scotland
Financial Automotive Division Services. Formerly Interim Director at NatWest and Lombard Financial Services.
Formerly Retail Managing Director, Retail Leisure Director, Commercial Director at Yates’ Wine Lodges plc. Formerly
General Manager, Regional Sales Director, Regional Sales Manager, National Purchasing and Pricing Manager at
Lex Vehicle Leasing Financial Services. Formerly Production Manager at H.J. Heinz Co. Formerly Production
Manager at Nabisco Brands Inc.
He attended Manchester University and gained a B.A. (Hons) in Economics and Economic History.
Approved in the UK by the Financial Conduct Authority (FCA).
46
APPENDIX 1: Prestige
People
David Head (UK)
Board Director: Privilege Finance / Nucleus Commercial Finance
Board Advisor: Research - Finance / Lending Strategies
Prestige Capital Management / Prestige Fund Management
Associated with Prestige since 2013
Mr Head is a Director of Privilege Holdings Limited (formerly Eastern Counties Finance Limited) and Nucleus
Commercial Finance Limited and serves as a board advisor to Prestige Fund Management Limited - focusing on
asset-based lending, leasing and finance solutions. He also advises on the company’s proprietary investments, as
well as researching new investment opportunities.
He brings a wealth of experience in commercial asset-based lending and finance activity, having worked for
Barclays Bank plc from 1974-2001, where his last role involved acting as a Corporate Manager responsible for a
mixed portfolio of 150 small and medium-sized enterprise clients with a bias towards property
development/investment and franchised motor dealers. From 2001-2010 he was employed by Allied Irish Bank
where he built from scratch over 5 years a GBP£160ml loan book which had minimum defaults and focused on
charitable, healthcare and education sectors, unlike most other British teams which were heavily exposed to the
property sector.
From 2010-2013 he was persuaded to rejoin Barclays where he acted as a Relationship Director with a portfolio of
over 40 corporate clients (sales turnover GBP£5M-£50M) biased towards professional service sectors. He brings a
particular set of professional skills including credit analysis, credit negotiation, business risk analysis, market risk
analysis and operational risk analysis as well as previous experience at British Insurance Association, London.
▪ As a result of the continued global economic slowdown and the problems caused by
the 2007/08 credit bubble, UK, EU and US bank deposit rates remain low, and returns
remain low and often below inflation. Additionally, traditional bank lending are still
subdued and traditional equity-based investments continue to be volatile.
▪ When reviewing various investment opportunities, Prestige researched the asset-
based finance / lending / leasing and factoring markets and the extent to which the
servicing of these markets has been abandoned by many of the traditional lending
banks. These markets are now mainly serviced by independent finance brokers who
place the business under a line of credit.
▪ Asset-Based Lending is a business loan secured by collateral (assets). The loan /
lease, or ‘line of credit’, is secured against inventory, accounts receivable and/or other
balance-sheet assets.
▪ Prestige has identified a specialist, Finance Arranger which primarily services the UK
agricultural sector and has a long track record of selecting high quality clients with
strong assets - resulting in low default rates.
APPENDIX 2: UK / SME Lending - Overview
Identifying an investment opportunity
47
▪ Since 2008, several large UK and international lenders have gone bust, been
nationalised or bailed out (Bank of Scotland, Royal Bank of Scotland, Lloyds, Northern
Rock, Alliance & Leicester, Bradford & Bingley, Barclays, Anglo Irish, Fortis, Dexia, ING,
Popular, CoOp, Kaupthing)… potentially meaning less ability to lend to non-core areas
▪ Many UK and international lenders’ share prices collapsed from their 2007 peaks and
remain significantly lower than 10 years ago despite recent strong gains in Western
stock-markets… potentially meaning less ability to lend to non-core areas
▪ All UK and EU banks are required to maintain significantly higher ‘Tier 1 Capital Ratios’
in line with ‘Basel 3’ rules… potentially meaning less ability to lend to non-core areas
▪ EU-wide caps on bankers’ bonuses will push up fixed costs… potentially meaning less
ability to lend to non-core areas
▪ UK Government ‘Vickers’ Report’ recommends that banks break up risky ‘Investment
Banking’ activities from ‘retail / Commercial Banking’ activities… potentially meaning
less ability to lend to non-core area
▪ Since 2008 several large UK Banking groups have merged, meaning less competition
(HBOS/Lloyds, RBS/NatWest, Santander/Alliance & Leicester/Bradford & Bingley)…
potentially meaning less ability to lend to non-core areas
APPENDIX 2: UK / SME Lending - Overview
Areas of Concern: Why traditional banks may lend less
48
▪ Royal Bank of Scotland (RBS) (previously the UK’s biggest lender) has exited
approximately 40 businesses over the past 5 years, has made redundant approximately
40,000 people and shrunk its balance sheet by approximately GBP1Tr / USD1.3Tr …
potentially meaning less ability to lend to non-core areas
▪ HSBC (Europe’s largest bank) has exited approximately 50 businesses over the past 5
years and has made redundant approximately 50,000 people … potentially meaning
less ability to lend to non-core areas
▪ ING (a previously-large UK agri lender) has left the UK, selling its retail banking
businesses to Barclays and putting its significant agri / industrial / commercial loan book
in ‘run off’
▪ Bank / regulator ‘Capital Adequacy’ requirements for commercial lending to small the
medium size enterprises is often significantly higher than that of home mortgage
lending
▪ The 6 largest US banking groups have spent over USD 100bn on litigation since 2008!SOURCE: Bloomberg
▪ The 4 largest UK banking groups were forced to set aside GBP 21.5bn to cover fines
and customer redress in 2013. SOURCE: Bloomberg
▪ BREXIT may force European lenders to leave or reduce exposures … potentially
meaning less ability to lend to non-core areas
APPENDIX 2: UK / SME Lending - Overview
Areas of Concern: Why traditional banks may lend less
49
SOURCE: Bloomberg
APPENDIX 2: UK / SME Lending - Overview
Areas of Concern: Credit
+8 Years since 2008 financial crisis!Royal Bank of Scotland Plc
Share Price 30 / 06 / 2007 GBP 63.30
Share Price 31 / 01 / 2018 GBP 2.88
-95%
Barclays Bank Plc
Share Price 30 / 06 / 2007 GBP 6.96
Share Price 31 / 01 / 2018 GBP 1.99
-70%
ARTICLE OF INTEREST: Small businesses losing overdrafts at a rate of GBP 5m per day
http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/11951747/Small-businesses-losing-overdrafts-at-a-rate-of-5m-per-day.html
ARTICLE OF INTEREST: 1000 Bank Branch Closures from 2015-2017
http://www.bbc.com/news/business-38302564
SOURCE: Bloomberg
50
APPENDIX 2: UK / SME Lending - Overview
Areas of Concern: Credit
SOURCE: Bloomberg51
9 Years since the 2008 financial crisis!
Banks: Market Capitalisation 2007 vs. 2018
Market Value as of Q2 2017, USDBn (Approximate)
Market Value as of Q2 2007, USDBn (Approximate)
HSBC Barclays Royal Bank of Scotland
215.0 48.5 50.2 UNITED KINGDOM0.00% -46.70% -58.17%
Citigroup
Goldman Sachs
201.7 98.1 UNITED STATES OF AMERICA-20.92% -1.91%
BNP Paribas UBS Unicredit Societe Generale Deutsche Bank Credit Suisse Credit Agricole
66.6 75.6 38.3 46.7 37.9 49.4 53.4 EUROPE-44.50% -34.82% -58.87% -41.60% -39.70% -34.12% -20.36%
7667
80
120
120
93
116
75
100
255
215
91
SOURCE: Bloomberg
APPENDIX 2: UK / SME Lending - Overview
Areas of Concern: Credit
SOURCE: Bank of England
52
M4 net lending to Private Non-Financial Corporations (PNFCs) 03/2004 – 12/2017
Bank Lending to SMEs Remains Weaker than 10 years ago
-10
-5
0
5
10
15
20
Mar-04
Mar-05
Mar-06
Mar-07
Mar-08
Mar-09
Mar-10
Mar-11
Mar-12
Mar-13
Mar-14
Mar-15
Mar-16
Mar-17
M4 net lending to PNFCsseasonally adjusted 12 months % change
APPENDIX 2: UK / SME Lending - Overview
Areas of Concern: Productivity
Agricultural Productivity 1990 = 100
Although the UK’s top farms are among the most productive in the world, many others
just trundle along. A general lack of investment and modernisation is likely to continue
to delay efficiency gains.
SOURCE: The Economist
53
APPENDIX 2: UK / SME Lending - Overview
Areas of Concern: Energy
UK Electricity Rate Vs. Natural Gas Vs. Oil - Pence per kWh GBP: 2000 - 2017
Rising Energy Costs:
ARTICLE OF INTEREST: Hinkley Point nuclear plant delayed, says EDF
http://www.bbc.co.uk/news/business-34149392
SOURCE: www.gov.uk
SOURCE: GOV.UK
54
0
2
4
6
8
10
12
14
16
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Pe
nce
per
kW
h
UK ElectricityRate
Natural Gas
Oil
APPENDIX 2: UK / SME Lending - Overview
Areas of Concern: Energy
Diesel Tax and Duty - Pence per Litre GBP: 01/2011 - 12/2017
High Energy Costs:
SOURCE: www.gov.ukSOURCE: GOV.UK
55
30.00
40.00
50.00
60.00
70.00
80.00
90.00
Ja
n-2
01
1
Ju
l-2
011
Ja
n-2
01
2
Ju
l-2
012
Ja
n-2
01
3
Ju
l-2
013
Ja
n-2
01
4
Ju
l-2
014
Ja
n-2
01
5
Jul-2
015
Ja
n-2
01
6
Ju
l-2
016
Ja
n-2
01
7
Ju
l-2
017
France
Germany
Greece
Italy
Luxembourg
Spain
UnitedKingdom
Pe
nce
Pe
r L
itre
APPENDIX 2: UK / SME Lending - Overview
Areas of Concern: Waste
Rising Waste Disposal Costs 1996 - 2018:
SOURCE: www.gov.uk
SOURCE: GOV.UK
56
YearRates of Landfill Tax
Standard Rate
1996-97 £7
1997-98 £7 0.00%
1998-99 £7 0.00%
1999-00 £10 42.86%
2000-01 £11 10.00%
2001-02 £12 9.09%
2002-03 £13 8.33%
2003-04 £14 7.69%
2004-05 £15 7.14%
2005-06 £18 20.00%
2006-07 £21 16.67%
2007-08 £24 14.29%
2008-09 £32 33.33%
2009-10 £40 25.00%
2010-11 £48 20.00%
2011-12 £56 16.67%
2012-13 £64 14.29%
2013-14 £72 12.50%
2014-15 £80 11.11%
2015-16 £83 3.25%
2016-17 £84 2.18%
2017-18 £86 2.01%
£0
£10
£20
£30
£40
£50
£60
£70
£80
£90
£100
199
6-9
7
199
7-9
8
199
8-9
9
199
9-0
0
200
0-0
1
200
1-0
2
200
2-0
3
200
3-0
4
200
4-0
5
200
5-0
6
200
6-0
7
200
7-0
8
200
8-0
9
200
9-1
0
201
0-1
1
201
1-1
2
201
2-1
3
201
3-1
4
201
4-1
5
201
5-1
6
201
6-1
7
201
7-1
8
£ p
er
tonne
UK Landfill Tax (Standard Rates) 1996 - 2018
APPENDIX 2: UK / SME Lending - Overview
Areas of Concern: Wages
SOURCE: http://www.ons.gov.uk/ons/taxonomy/index.html?nscl=Weekly+Earnings#tab-data-tables
Rising Employer Costs: new minimum “living wage” has been introduced
Average Weekly Earnings (Index) 03/2000 - 09/2017
SOURCE: ONS.GOV.UK
57
90.0
100.0
110.0
120.0
130.0
140.0
150.0
160.0
170.0
Ma
r 00
Ma
r 01
Ma
r 02
Ma
r 03
Ma
r 04
Ma
r 05
Ma
r 06
Ma
r 07
Ma
r 08
Ma
r 09
Ma
r 10
Ma
r 11
Ma
r 12
Ma
r 13
Ma
r 14
Ma
r 15
Ma
r 16
Ma
r 17
APPENDIX 3: Industry Overview
UK Farming / Agricultural / Food
▪ Farming contributed GBP 10bn / USD 13.13bn to the UK economy in 2014, or 0.6% ofthe GDP
▪ The total area of agricultural land in 2015 was approximately 17.1mn hectares, about69% of the total land area in the United Kingdom (excluding inland water)
▪ Agriculture provides around 59% of Britain's food needs even though it employs just1.5% of the country's labour force
▪ From 1979 to 2010 total factor productivity for agriculture has grown by 49%1
▪ The total income from farming per AWU2 has nearly doubled from 1999 to 2010 in realterm prices
▪ The UK farming sector could be characterised as “asset rich and cash poor”
▪ The UK continues to have the some of the most valuable farm land in the world
▪ Significant GBP / USD investment and modernisation in many areas are required toimprove productivity and efficiency
1 Total factor productivity, shows the volume of output leaving the industry per unit of all inputs including fixed capital and labour.
It encompasses all businesses engaged in farming activities, including specialist contractors.
2 Annual work unit - represents the equivalent of an average full-time person engaged in agriculture.
SOURCE: www.defra.gov.uk - Department for Environment, Food and Rural Affairs58
Historically low returns onbank deposits. This is likelyto continue for several years.
The REAL RETURN for
investors is negative.
SOURCE: Bloomberg
Continued uncertainty and
volatility in the equity, bonds
and commodity markets.
Are these the asset classes
you want to be exposed to
in the medium term?
Index has been rebased to USD100
for comparison purposes only
SOURCE: Bloomberg
APPENDIX 4: Market Overview
Equities & Yield
59
0%
1%
2%
01/2
009
01/2
010
01/2
011
01/2
012
01/2
013
01/2
014
01/2
015
01/2
016
01/2
017
01/2
018
3 month LIBOR USD 01/2009- 01/2018
50
70
90
110
130
150
170
12/1
999
12/2
000
12/2
001
12/2
002
12/2
003
12/2
004
12/2
005
12/2
006
12/2
007
12/2
008
12/2
009
12/2
010
12/2
011
12/2
012
12/2
013
12/2
014
12/2
015
12/2
016
12/2
017
MSCI World Index12/1999 - 01/2018
APPENDIX 5: Additional Background Research
Published Media
60
UK Agricultural Sector Attracts Overseas Investors
http://www.prestigefunds.com/wp-content/uploads/Financial-Times-Investors-Take-a-Shine-to-UK-Agriculture.pdf
Financial Times Q3 / 2017
The role of UK lending funds is increasing in the post - Brexit world
http://www.prestigefunds.com/wp-content/uploads/AIMA-Journal-Q2-2017.pdf
AIMA Journal Q2 / 2017
Private Capital Could End Farmers’ Lending Drought
http://www.prestigefunds.com/wp-content/uploads/ARTICLE-Prestige-Dow-Jones-Private-Equity-News-03-2016.pdf
Dow Jones Q1 / 2016
Addressing the funding gap in post - Brexit Britain
https://www.financierworldwide.com/addressing-the-funding-gap-in-post-brexit-britain/#.WRNiJMbTXIV
Financier Worldwide Q2 / 2017
International Fund Reference Codes
Participating I-Shares
Participating ID-Shares
61
CURRENCYISIN
code
SEDOL
code
CUSIP
code
MEXID
code
BLOOMBERG
code
MORNING STAR
code
VALOR
code
MAS
code
CIMA
code
INCORPORATION
codeGIIN FATCA ID CITICODE
USD KYG722711853 BK0S263 G72271 185 OGAABW PRAFISU KY F00000T7LR 23792898 103OZPE2978 16040 SH-220502 EAGA1Z.99999.SL.136 EAGA1Z N6QX
EUR KYG722711937 BK0S252 G72271 193 OGAABX PRAFISE KY F00000T7LS 23793540 103OZPE2978 16040 SH-220502 EAGA1Z.99999.SL.136 EAGA1Z N6QY
GBP KYG722711770 BK00FP9 G72271 177 OGAABY PRAFISS KY F00000T7LT 23793583 103OZPE2978 16040 SH-220502 EAGA1Z.99999.SL.136 EAGA1Z N6QZ
CHF KYG722712018 BK0S274 G72271 201 OGAABZ PRAFISF KY F00000T7LU 23793744 103OZPE2978 16040 SH-220502 EAGA1Z.99999.SL.136 EAGA1Z N6RA
SEK KYG722712190 BK0S285 G72271 219 OGAACA PRAFISK KY F00000T7LV 23793811 103OZPE2978 16040 SH-220502 EAGA1Z.99999.SL.136 EAGA1Z N6RB
CURRENCYISIN
code
SEDOL
code
CUSIP
code
MEXID
code
BLOOMBERG
code
MORNING STAR
code
VALOR
code
MAS
code
CIMA
code
INCORPORATION
codeGIIN FATCA ID CITICODE
USD KYG722712844 BDGRV79 G72271 284 PRAFIDU KY F00000XMUO CH 30169859 103OZPE2978 16040 SH-220502 EAGA1Z.99999.SL.136 EAGA1Z
Legal Disclaimer & Risk Warning
NOTE: This document is issued by Prestige Asset Management Limited (PAML) which is authorised and regulated in the UK by the Financial Conduct Authority
(FCA), and is for information purposes only. This document does not constitute an offer to sell or a solicitation of an offer to buy shares in any Prestige Fund/s and
is only intended for distribution to persons permitted to receive it by Section 238 of the Financial Services and Markets Act 2000 (FSMA). Prestige Alternative
Finance Fund Limited (PALTF) is an experienced investor Fund and is not intended for retail investors. If you are unsure of your classification you should seek
independent professional advice. The Investment Fund/s and services offered or described within this document are marketed through PAML, a member of both
the Alternative Investment Management Association (AIMA) and the Chartered Institute for Securities and Investment (CISI). The Fund is registered by the
Cayman Island Monetary Authority (CIMA) and the Singapore Monetary Authority (MAS), and is therefore not subject to UK FCA authorisation and regulation or
UK investor protection and compensation schemes. The PALTF Fund is an Unregulated Collective Investment Scheme (UCIS) / Non mainstream Pooled
Investments (NMPI) for UK purposes and also classified as an Alternative Investment Fund (AIF) which is subject to the scope of the Alternative Investment Fund
Managers Directive (AIFMD) for whose purposes PALTF is managed by a Third Country AIFM. PALTF is managed in the Cayman Islands and may be marketed
within the EU. In the UK UCIS/NMPI are considered higher risk and not suitable for all types of investor. There may be restrictions when marketing to certain
jurisdictions. It is your responsibility to be informed and to observe all applicable laws and regulations of any relevant jurisdiction and to satisfy yourself that your
use of this information and any subsequent investment in the fund is permissible under the applicable laws, rules and regulations of any applicable government,
governmental agency or regulatory organisation where you reside. Trading of PALTF began in 01/2009 without outside third party investors on 04/2009. Any
results shown prior to this are a composite proforma based upon actual lending data provided by the Underlying Investment Advisor/s and should not be relied
upon for any investment decisions. All asset allocation scenarios are subject to change without notice. All trading strategies are denominated in GBP unless
otherwise stated and all management fees, performance fees and any loan default data as described in the Information Memorandum have been deducted from
their historic track records. Past and simulated performance is not a reliable guide to future performance - investments can go down as well as up and you may get
back less than your original investment. Any track record/s and performance data shown is based on the actual lending results published by underlying Investment
Advisor/s within the Fund, which were in existence at the time of creation but should not be relied upon when making a decision to invest. Investment allocation
scenarios shown are for example only and are subject to change and may vary. Subscription for shares in any Prestige Fund or investment portfolio can only be
made by completing the relevant application form that accompanies the Fund’s Offering Memorandum / Offering Supplement or Issuing Document. Any
comparisons between different funds have been made on a Net Asset Value (NAV) basis, whereas any comparisons with an index have been made on an offer-to-
offer basis, which the Prestige Fund directors believe is fair and not misleading. Comparative data has been obtained from reliable sources. Any comments, views
and opinions expressed in any Investment Advisors Summary within this document reflect those of the underlying Investment Advisor/s and may not be the current
views, comments and opinions of PAML and/or its affiliates. All trademarks are recognised. The MSCI World Index is a registered trademark of Morgan Stanley
Capital International. The S&P500 Index is a registered trademark of Standard & Poor’s Group. The UK 10 Year Treasury Index is made up of actual monthly bond
yields and turned into a monthly index. The returns of the index are representative of what could be achieved if one held that bond during that particular time
period. Further information on facts, figures and literature contained within the document is available upon request. Neither PAML, PALTF nor the Fund’s
Administrator accept any liability from investors who rely upon any other information with regard to any Prestige Fund/s.
The Representative of the Fund/s in Switzerland is OpenFunds Investment Services AG, with its registered office at Seefeldstrasse 35, CH-8008, Zurich, T: +41 44
500 31 08, www.open-funds.ch. The Paying Agent in Switzerland is Società Bancaria Ticinese SA, Piazza Collegiata 3, CH-6500, Bellinzona, T: +41 91 821 51 21,
F: +41 91 825 66 18, www.bancaria.ch. The distribution of Shares in the Fund in Switzerland must be made exclusively to Qualified Investors. The place of
performance and jurisdiction for the Shares in the Fund distributed in Switzerland is at the registered office of the Representative. Publications in respect of the
Shares are effected on the electronic platform www.fundinfo.com. The disclaimer on OpenFunds acting as Swiss legal representative has been drawn up in the
English language. In case of any discrepancy between the English text version and any translation thereof, the English version shall prevail and be regarded as
binding. . This document may be provided by Kroma Capital Partners Ltd (‘Kroma’). Kroma is regulated by the Dubai Financial Services Authority and is located at
Unit 813A, Level 8, Liberty House, Dubai International Financial Centre, PO Box 111289, Dubai, UAE. The material provided by Kroma is intended only for
Professional Clients (as defined by the DFSA Conduct of Business module), and must not be relied upon by another person. Unless advised otherwise, all sources
of data are those of Prestige. © 201862
International Institutional Distribution
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