Dynamic Credit launches Diversified Loan Fund Dynamic Credit launches Diversified Loan Fund

Dynamic Credit launches Diversified Loan Fund

Matt Kus - VP Business DevelopmentMatt Kus15 June 2020 at 11:45

Asset manager and direct lender Dynamic Credit (€8.2B AUM) launches Diversified Loan Fund with seed investments from Dutch and German institutional investors.

Dynamic Credit announced the launch of its Diversified Loan Fund today with seed commitments from Dutch and German institutional investors. Utilizing a nimble investment strategy built to deliver stable returns through economic cycles, the fund will purchase small balance consumer and SME loans originated by US and European lenders. In addition to purchasing newly originated loans, the fund will also actively seek opportunities in seasoned portfolios on secondary markets. Offered in both USD and EUR denominated share classes to Professional Investors only, the fund seeks to deliver net returns of 5-7%*.

The Diversified Loan Fund is a testimony of the true strength of Dynamic: sourcing and managing attractive credit investments through cycles. The two portfolio managers running the fund from New York and Amsterdam each have over 15 years of experience, 12 of which working together. Excited to put this strategy, that has worked so well for us, to work for our clients.

Tonko Gast, CEO

Dynamic Credit’s active loan selection strategy is built on a proprietary default probability model developed using robust quantitative analysis combined with deep alternative fixed income investment experience, enabled by proprietary technology developed by LoanClear. The combination allows for real-time scoring and bidding on loans offered by the largest bank and non-bank consumer loan originators. The strategy targets loans from the borrowers who are most likely to remain employed and are least likely to default, building a granular yet diversified portfolio of short duration, small ticket loans. On balance sheet testing of the strategy has resulted in over 10% cash-on-cash return from July 2019 through May 2020 with no defaults or delinquencies*.

Over the last 17 years, Dynamic Credit established its expertise in managing investor money through crisis periods. During the Global Financial Crisis, Tonko Gast (Dynamic’s Founder) advised the Dutch Central Bank and Ministry of Finance, helping them to de-risk ING’s portfolio of USD 39B resulting in a USD 1.4B gain for Dutch taxpayers. Later, Dynamic Credit successfully ran two strategies through the European Debt Crisis (2012 – 2014) with distinct risk profiles catering to different investor types. Through the crisis, the “Opportunities ABS” strategy returned 20.95%* while the “Defensive ABS” strategy returned 9.29%*.

*Past performance may not be a reliable guide to future performance.

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Tonko Gast, CEO
Tonko Gast