Chorus Capital invests in performing corporate loan portfolios through risk-sharing transactions with banks in Europe and across the globe
Banks across Europe - and increasingly across the world - are facing multiple, long-term challenges. Chief among those issues are increasing capital requirements and insufficient profitability.
Risk-sharing transactions are an integral part of the capital management toolkit for a growing number of banks. First developed in the mid 1990s, they have been used by many of Europe's largest banks for the past 20 years. Properly structured, they allow banks to recycle capital and free up credit lines to support new lending.
Risk-sharing represents a long-term, scalable investment opportunity to earn stable risk-adjusted returns (mostly through contractual income) from highly diversified, performing pools of loans. These assets have marginal, if any, correlation with the public credit markets.
- Focus on large corporate loan portfolios (Revolving Credit Facilities extended to primarily Investment Grade borrowers)
- Senior-most exposures in the borrower's capital structure, with the highest recovery rates among all debt instruments
- High level of granularity and diversification across borrowers, sectors and countries
- No Non-Performing Loans
- Strong alignment of interest with the bank through significant risk retention
- Low credit loss rates through cycles, notably during the Global Financial Crisis
- Capital preservation as demonstrated by our stress tests
- Marginal correlation to public credit markets
- No market risk in risk-sharing transactions
- Marginal bank counterparty risk
- Responsible Investment Policy adopted in March 2019
- Portfolios screened for non-ethical credit exposures during underwriting
- A or BBB ESG scores for all of our active funds