Investor presentation - julia geiger

Please enable JavaScript to view the full PDF

Investor presentation Luxembourg, January 2022 K&R SA, SICAV-RAIF | [email protected] K&R SA, SICAV-RAIF A top-performing niche fund family is launching the Universal Income Fund aiming for 5-7% annual return ▪ Founders with an institutional investment background We are now raising the founded Klein & Reich (K&R SA, SICAV) in 2017, aiming to Universal Income Fund, invest their own assets and those of fellow family offices launching in Q1, 2022: and HNWIs in niche strategies to capture excess returns (current founder co-investment of EUR >2m in the funds) ▪ Highly attractive returns 5-7% p.a. ▪ Strong independent Board of Directors, led by senior executives (Ex-CEO Luxembourg stock exchange; Ex-CEO ▪ Low volatility, little Brussels stock exchange, ex-CEO Fundsquare) equity correlation and crisis-resistant ▪ Long-term orientation and value-driven approach with selective co-investors allow to focus on ▪ Tested and proven strategy achieving extraordinary risk-adjusted returns ▪ The fund’s longest-run equity strategy is ranked #1 in Citywire Selector and has performed 2x market return over the last 8 years K&R SA, SICAV–RAIF | Investor presentation Universal Income Fund returns 5-7% p.a. Universal Income Fund (UIF) aims to provide 5-7% annualized net return in EUR with limited volatility ▪ Key objective of the fund is the generation of sustainable positive returns with low volatility, relatively independent of equity market developments ▪ Expected net return is 5-7% p.a. in EUR with positive returns over any High and 12-month period stable ▪ Fund acts as a stabilizing portfolio component and deliver high and stable returns with returns with low volatility and low correlation to other asset classes limited volatility ▪ Fund collects number of different factor risk premia (credit risk, illiquidity risk), alternative risk premium (e.g., insurance linked, bank capital relief, etc.) and respective manager alpha ▪ Universal Income Fund offers relatively high liquidity (monthly redemptions with 2 months prior notice) K&R SA, SICAV–RAIF | Investor presentation 3 Access to niche strategies Fund offers diversified EUR-hedged, attractive returns through long-standing network of niche managers ▪ Manager selection: Long experience in finding best managers and strategies in Value a wide area of niches in alternative income (supply chain finance, CLO, capital proposition: relief, life settlements, litigation financing, etc.) Knowledge ▪ Access: Many of the selected strategies are only available to large institutional of and investors or closed entirely. The fund gains access through its long-standing access to network among managers, as well as scale of the fund top ▪ Liquidity: Fund invests into a mix of liquid (up to 3 months) and illiquid (>3 managers, months to multiple years) strategies, and offers optimized liquidity (bi-monthly) attractive to its investors compared to a direct investment liquidity and EUR-hedged ▪ Diversification: UIF offers access to a broad set of strategies with significant diversified diversification for investor returns ▪ Hedging: UIF hedges returns into a EUR share class and a CHF share class K&R SA, SICAV–RAIF | Investor presentation 4 Historic return of strategy (1/2) Highly attractive returns, low volatility, little equity correlation and crisis-resistant Annual return ▪ Return: Annualized EUR returns since 04/2016 to 9/2021 of past 9.5% net of all fixed and variable management fees 5 years UIF 2016-21* ▪ Volatility: Annual volatility of ~7.7% (less than half of equity markets) 9,5% ▪ Correlation: Low correlation (~0.5) with equity markets ▪ Crisis resistance: Solid resistance to market shocks. Covid-impact on underlying strategies in March 2020 (-12.3%), recovered within 8 months Note: Fund’s strategy historic performance simulated based on performance of underlying strategies followed closely, partially invested at the time and fully analyzed by the UIF’s Investment Committee; historic performance shown is a mix of actual realized performance in life trading of institutional portfolios managed by IC members and realized performance of underlying strategies paper-traded by IC members (overall metrics presented here are based on back-testing to integrate and fully reflect actual fees of the fund); Equity market comparisons based on MSCI World TR in EUR metrics. * 12-month rolling window average return since April 2016 (first period 04/16-04/17) until 09/21; all returns net of fees (after fees) K&R SA, SICAV–RAIF | Investor presentation 5 Historic return of strategy (2/2) Unmatched mix of positive returns and comparatively low volatility UIF strategy (synthetic) versus EURIBOR and Equities UIF Strategy (in EUR) – net of fixed & variable fee 690 BofA High Yield Index Europe 590 Constrained (in EUR) 490 3m EURIBOR 390 290 190 90 Note: Fund’s strategy historic performance simulated based on performance of underlying strategies followed closely, partially invested at the time and fully analyzed by the UIF’s Investment Committee; historic performance shown is a mix of actual realized performance in life trading of institutional portfolios managed by IC members and realized performance of underlying strategies paper-traded by IC members (overall metrics presented here are based on back-testing to integrate and fully reflect actual fees of the fund); Equity market comparisons based on MSCI World TR in EUR metrics. * 12-month rolling window average return since January 2016 (first period 01/16-01/17) until 09/21; all returns net of fees (after fees) K&R SA, SICAV–RAIF | Investor presentation 6 Universal Income Fund strategy Fund strategy based on niche strategies in fixed income, in both liquid and illiquid niches ▪ Objective: Provide access to a pool of income-generating assets and niche strategies, many of which are only accessible to institutional investors; thereby generating average returns of 5-7% p.a. (in EUR) with low volatility and limited equity-market correlation. ▪ Investment universe: Mix of liquid and illiquid fixed income instruments, spanning carefully selected opportunities in fields such as private debt, structured debt, alternative income premium and certain niche strategies. ▪ Strategy: Focus on hand-selected specialist managers in attractive market niches, often fully independent from equity markets, that offer industry-leading risk-return characteristics paired with down-side protection through the cycle. Returns are hedged to EUR to mitigate foreign exchange risk. ▪ Portfolio construction: ~10-15 mostly uncorrelated alternative income strategies with numerous underlying positions to manage risk and factor exposure. Liquidity management ensured through mix of liquid and highly attractive but less liquid strategies. Fund will harvest different risk premia credit risk, illiquidity risk, alternative risk premium (e.g., insurance linked, bank capital relief, etc.) and capture respective manager alpha K&R SA, SICAV–RAIF | Investor presentation 7 Key terms of Universal Income Fund (1/3) K&R SA, SICAV-RAIF – Universal Income Fund Class A shares Class C shares ▪ The Universal Income Fund (UIF) is a diversified investment fund providing access Currency EUR CHF to a pool of hand-picked strategies with strong and stable income components, NAV (at launch) EUR 1’250 CHF 1’250 good downside protection and comparatively low correlation to equity Minimum invest. EUR 125’000 CHF 150’000 markets Income utilization Reinvesting ▪ The return target is 5-7% p.a. (in EUR) Restricted Only qualified, non-US investors ▪ UIF will invest into a mix of liquid (up to 3 months) and illiquid (>3 months to multiple Liquidity Monthly with 2 months prior notice years) strategies, many of which are only available to large institutional investors Launch date End of Q1, 2022 ▪ The fund offers monthly liquidity with 2- month prior notice Investors in UIF will be exposed to investment risks including but not limited to credit and default risk, counterparty risk, FX risk (mostly hedged), equity market risk, liquidity risk, portfolio risk, and underlying manager specific risks, as well as other risks. Please observe the Offering Memorandum for a complete overview of all related risks. K&R SA, SICAV–RAIF | Investor presentation 8 Key terms of Universal Income Fund (2/3) K&R SA, SICAV-RAIF – Universal Income Fund ▪ Fund structure for “well-informed investors” (SICAV SA-RAIF) with min. invest of EUR 125k/CHF 150k, Luxembourg-based since 2017 ▪ Alternative Investment Fund Manager (AIFM): MC Square SA Legal set-up ▪ Board of Directors: Senior non-executive Directors with deep and long- standing experience ▪ Base currency: EUR, CHF ▪ Management fee: 0.70% on fund-level Fees and ▪ Success fee: 10% with high water mark liquidity and ▪ Subscription/redemption fee: 0% size restriction ▪ NAV calculation: Monthly ▪ Liquidity: Monthly liquidity with 2-month prior notice K&R SA, SICAV–RAIF | Investor presentation 9 Key terms of Universal Income Fund (3/3) K&R SA, SICAV-RAIF – Universal Income Fund ▪ Depositary bank/custody: Quintet Private Bank (Europe) SA Service ▪ Fund administration: European Fund Administration (EFA) SA providers ▪ Auditor: KPMG Luxembourg ▪ Founders have co-invested EUR >2m in K&R SA, SICAV-RAIF and are highly committed to the long-term success of the fund Founder commitment ▪ Entrepreneurial spirit of doing well when investors do well and reflect this in fair management fees and incentive through success fees K&R SA, SICAV–RAIF | Investor presentation 10