Wow. Reading the prospectus this looks entirely unattractive. I see why they pitch it the way they have, that’s what institutional capital wants. An avoid for me though. Also how can you apply a terminal growth rate to a credit fund? Lols. Also insufficient info provided in the prospectus to see what is actually going on in the credit fund.
terminal growth rate is growth rate of a company’s free cash flows beyond the forecast period in a discounted cash flow. For a credit fund, you focus on the cash flows generated from interest income and principal repayments.
@@brandoncliffswarts5100 there’s no terminal growth rate for fixed interest fixed term debt. Also the prospectus does NPV of the cash flows plus terminal value that doesn’t exist, then adds in present value of the debt which double counts the present value of the debt
@@brandoncliffswarts5100correct. But what rates of impairments are they using, changes in working capital. These are typically underweighted and used as an excuse for poor performance retrospectively. This is why I hate DCF valuations, especially when the underlying asset is unproven and hard to see holistically. Secondly, are they a loan shark, or private equity? I don’t like this setup.
@@erick7862 , when using impairment rates for a credit fund, use expected credit loss rates and consider the probability of default and loss. For changes in working capital, consider net working capital which is difference between current assets and current liabilities.
Can I get a short position?
I'm old school - would employ him as my personal trainer but won't be investing....
A NO for me.
Wow. Reading the prospectus this looks entirely unattractive. I see why they pitch it the way they have, that’s what institutional capital wants. An avoid for me though. Also how can you apply a terminal growth rate to a credit fund? Lols. Also insufficient info provided in the prospectus to see what is actually going on in the credit fund.
terminal growth rate is growth rate of a company’s free cash flows beyond the forecast period in a discounted cash flow.
For a credit fund, you focus on the cash flows generated from interest income and principal repayments.
@@brandoncliffswarts5100 there’s no terminal growth rate for fixed interest fixed term debt. Also the prospectus does NPV of the cash flows plus terminal value that doesn’t exist, then adds in present value of the debt which double counts the present value of the debt
@@brandoncliffswarts5100correct. But what rates of impairments are they using, changes in working capital. These are typically underweighted and used as an excuse for poor performance retrospectively. This is why I hate DCF valuations, especially when the underlying asset is unproven and hard to see holistically.
Secondly, are they a loan shark, or private equity? I don’t like this setup.
@@erick7862 terminal growth rate is irrelevant for where they apply it. It looks dishonest
@@erick7862 , when using impairment rates for a credit fund, use expected credit loss rates and consider the probability of default and loss.
For changes in working capital, consider net working capital which is difference between current assets and current liabilities.