Revolution Asset Management (Revolution) was founded in February 2018 with the vision of providing investors with greater access to private debt. The investment team brought their combined 60 plus years’ experience in credit analysis and structuring of private debt opportunities to create a niche investment strategy focused on delivering a target return of the RBA cash rate plus 4% to 5% p.a. (gross of fees and expenses) by providing investors with access to corporate leveraged loans, private asset backed securities and senior real estate loans in Australia and New Zealand.
With a blend of backgrounds and expertise, the synergies between the investment team help to drive value for investors. The investment team is strongly supported by Channel Capital’s institutional-quality, non-investment and operations capabilities.
The Revolution Private Debt Fund I was incepted on 11 December 2018 and closed to new investors in June 2019, fully deploying its capital of A$200 million by December 2019 – ahead of original expectations. The Revolution Private Debt Fund I delivered 6.37% p.a. (gross of fees and expenses) since inception to 31 August 2020. Its follow-on fund − the Revolution Private Debt Fund II achieved its first close in December 2019, and successfully provided flexibility on its investment structure to create a wholesale offering through an open ended fund with limited liquidity. In August this year, Revolution surpassed the A$500 million mark in deployed capital.
As the winner of the Hedge Funds Rock + Alternative Investment Awards Emerging Manager, Revolution has been recognised as a manager who delivers performance in line with its objectives and provides consistent, competitive risk-adjusted returns independent of the direction of financial markets.
The growth in Revolution’s assets under management over the past two and half years has been driven largely by yield-oriented institutional and wholesale investors who have patient capital to invest. Revolution’s investors are diversified by type and geography and include Australian and New Zealand pension funds, endowment funds and foundations, high net worth and family office clients, as well as larger separate account investors.
For our investment manager partner Revolution, it comes down to what asset owners need in order to meet their portfolio objectives. Clients today are generally looking not just for added return from their investment managers, but other specific skills and experience, such as investing in illiquid assets, credit discipline, and the ability to withstand multiple market downturns.
As markets evolve, investors will continue to seek returns that provide genuine diversification in their portfolios. Protecting against downside risk, generating uncorrelated and reliable income, and being prepared to protect against either inflation or deflation are also key concerns. Revolution’s goal is to deliver private debt strategies that solve these needs, in ways that represent truly defensive and diversifying sources of income.
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