Download Sprott Bridging Income Fund LP Overview

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Sprott Bridging Income Fund LP
September 2015
Formerly Bridging Credit Fund LP. Effective July 25, 2014, Sprott Asset Management LP became the successor manager to the Fund.
Disclaimer
Sprott Asset Management LP is the investment manager to the Sprott Funds (collectively, the “Funds”).
The Sprott Bridging Income Fund LP (the “Fund”) is offered on a private placement basis pursuant to an offering
memorandum and is only available to investors who meet certain eligibility or minimum purchase amount
requirements under applicable securities legislation. The offering memorandum contains important information about
the Fund including its investment objective and strategies, purchase options, applicable management fees,
performance fees, other charges and expenses, and should be read carefully before investing. Performance data
represents past performance of the Fund and is not indicative of future performance. Data based on performance
history of less than five years may not give prospective investors enough information to base investment decisions on.
Please contact your own personal advisor on your particular circumstance. This communication does not constitute an
offer to sell or solicitation to purchase securities of the Fund.
The information contained herein does not constitute an offer or solicitation by anyone in the United States or in any
other jurisdiction in which such an offer or solicitation is not authorized or to any person to whom it is unlawful to make
such an offer or solicitation. Prospective investors who are not resident in Canada should contact their financial
advisor to determine whether securities of the Funds may be lawfully sold in their jurisdiction.
The Fund is generally exposed to the following risks. See the offering memorandum of the Fund for a description of
these risks: Speculative Investments; Limited Operating History for the Partnership; Distributions and Allocations;
Class Risk; Possible Loss of Limited Liability; Repayment of Certain Distributions; Limited Partners Not Entitled to
Participate in Management; Dependence of Manager on Key Personnel; Reliance on Manager; Dependence of SubAdvisor on Key Personnel; Reliance on Sub-Advisor; Limited Ability to Liquidate Investment; Possible Effect of
Redemptions; Tax Liability; Charges to the Partnership; Potential Indemnification Obligations; Not a Public Mutual
Fund; Changes in Investment Strategies; Valuation of the Partnership’s Investments; Lack of Independent Experts
Representing Limited Partners; No Involvement of Unaffiliated Selling Agent; General Economic and Market
Conditions; Unspecified Investments; Competitive Environment; Illiquidity of Underlying Investments; Credit Risk;
Impaired Loans; No Insurance; Non-Controlling Investments; Joint Ventures and Co-Investments; Litigation; Fixed
Income Securities; Equity Securities; Possible Correlation With Traditional Investments; Idle Cash; Currency Risk;
Concentration; Indebtedness.
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Sprott Asset Management LP
Sprott Bridging Income Fund LP
Disclaimer
Forward-Looking Statements
This presentation contains forward-looking statements which reflect the current expectations of management
regarding future growth, results of operations, performance and business prospects and opportunities. Wherever
possible, words such as “may”, “would”, “could”, “will”, “anticipate”, “believe”, “plan”, “expect”, “intend”,
“estimate”, and similar expressions have been used to identify these forward-looking statements. These statements
reflect management’s current beliefs with respect to future events and are based on information currently available to
management. Forward-looking statements involve significant known and unknown risks, uncertainties and
assumptions. Many factors could cause actual results, performance or achievements to be materially different from
any future results, performance or achievements that may be expressed or implied by such forward-looking
statements. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the
forward-looking statements prove incorrect, actual results, performance or achievements could vary materially from
those expressed or implied by the forward-looking statements contained in this document. These factors should be
considered carefully and undue reliance should not be placed on these forward-looking statements. Although the
forward-looking statements contained in this document are based upon what management currently believes to be
reasonable assumptions, there is no assurance that actual results, performance or achievements will be consistent
with these forward-looking statements. These forward-looking statements are made as of the date of this presentation
and Sprott does not assume any obligation to update or revise.
Views expressed regarding a particular company, security, industry or market sector should not be considered an
indication of trading intent of any investment funds managed by Sprott Asset Management LP. Any reference to a
particular company is for illustrative purposes only and should not to be considered as investment advice or a
recommendation to buy or sell nor should it be considered as an indication of how the portfolio of any investment fund
managed by Sprott Asset Management LP is or will be invested.
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Sprott Asset Management LP
Sprott Bridging Income Fund LP
Agenda
1.
Bridging Finance Inc. Overview
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2.
Sprott Bridging Income Fund LP Overview
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3.
Factoring
Investment Criteria
Risk Mitigation
Recent Transactions
Performance
Value Proposition
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About The Fund
Offering Overview
Strategy Overview
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4.
About the Sub-Advisor
Investment Team
Why Invest in the Fund?
Why Borrowers Choose Bridging Finance Inc.
Sprott Asset Management LP
Sprott Bridging Income Fund LP
Bridging Finance Inc. Overview
About the Sub-Advisor
Bridging Finance Inc. (the “Sub-Advisor”)
Bridging Finance Inc. is a Restricted Portfolio Manager and Exempt Market Dealer and is
registered across Canada.
Bridging Finance Inc. has a track record of strong private investment performance with
minimum volatility and attractive yield.
We invest in Private Debt of middle-market Canadian and U.S. companies unable to access
traditional financing sources.
Our team has extensive experience in private debt.
The Fund is audited annually with independent valuation by Ernst & Young LLP and
administration is conducted by an independent third party (CommonWealth Fund Services Ltd.).
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Sprott Asset Management LP
Sprott Bridging Income Fund LP
Bridging Finance Inc. Overview
Investment Team
Natasha Sharpe, CEO and Chief Investment Officer
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Natasha is the Chief Executive officer and Chief Investment Officer of the Sub-Advisor. Natasha was previously the
Chief Credit Officer for Sun Life Financial where she was responsible for creating risk policy for the company’s $110billion global portfolio of managed assets. Prior to that, Natasha spent over 10 years at BMO Financial Group where
she led various teams in risk assessment and corporate finance. In 2010, Natasha was named as one of Canada’s
Top 40 Under 40. Natasha is a director of public, private, and non-profit companies. She holds a PhD and a Masters
of Business Administration from the University of Toronto.
David Sharpe, President and Chief Operating Officer
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David is President and Chief Operating Officer of the Sub-Advisor. David is responsible for strategic relationships for
the firm and ensuring there are proper operational controls in place for sustainable growth of the organization. David
has close to two decades of financial services industry experience, in roles such as General Counsel, Chief
Compliance Officer and Chief Risk Officer for leading financial organizations, and previously was the head of
investigations for the Mutual Fund Dealers Association of Canada. David is a lawyer and has been a member of the
Law Society of Upper Canada since 1997. David has an LLB from Queen’s University, an LLM in Securities Law from
Osgoode Hall Law School and a Masters of Business Administration from the Richard Ivey School of Business,
University of Western Ontario.
Sprott Asset Management LP
Sprott Bridging Income Fund LP
Success Factors
Key Success Factor
Description
Credit Quality and
Credit Discipline
• Credit quality and credit discipline are the keys to success in
secondary lending.
• Bridging Finance has extremely robust process controls.
• Operational risks are mitigated using key process controls,
documented funding processes, field audits, site visits, customer
calls and other recognized practices.
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Deal Sourcing
• Given the short investment term, a constant deal pipeline to
replace maturing deals is important. Management has strong
industry contacts as well as a national professional advisor
contacts.
Professionalism and
Reputation
• Maintaining high standards of professionalism and
developing/maintaining a strong reputation earned through: positive
experience for advisors, and clients; integrity and professionalism
of conduct.
Sprott Asset Management LP
Sprott Bridging Income Fund LP
Investment Thesis
Sprott Bridging Income Fund LP (the “Fund”)
A diversified product
for yield-seeking
Investors
• Investors seeking safety as well as yield have had limited options.
Private Debt
• All loans are secured against fully vetted Accounts Receivable,
Inventory, recently appraised Machinery and Equipment and Real
Estate.
• Sprott Bridging Income Fund LP is designed to produce yield in a
yield-challenged, zero-interest rate environment.
• Diversification of risk across the Fund’s portfolio is carefully
measured and managed.
Attractive industry
profile and changing
market dynamics
• Attractive industry profile and changing market dynamics
• More costly for banks to service the small-medium sized Company
market.
• SME market represents the largest segment of the Canadian
economy.
Professional and
experienced
management team
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Sprott Asset Management LP
• Professional and experienced management team
• Management has significant credit, restructuring and turnaround
experience and extensive relationships within the investment
community providing for strong deal sourcing
Sprott Bridging Income Fund LP
Portfolio
Sprott Bridging Income Fund LP (the “Fund”)
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Composition
Private debt is approximately 75% of the SBIF portfolio with the rest
being factoring. There are approximately 60 loans and over 1500
receivables in the Fund.
Loan characteristics
All the loans are demand facilities and are Prime-rate based, which
reduces interest rate risk. There is always a defined exit at the outset
which tends to be Tier-One banks.
Duration
The duration of the Private Debt loans is approximately 7 months and
for factoring is 55 days.
Collateral
The Private Debt Loans are over-collateralized and utilizes a forcedliquation valuation instead of market valuation, as assessed by 3rd
party valuation firms.
Sprott Asset Management LP
Sprott Bridging Income Fund LP
Sector Allocations
Allocations as at July 31, 2015
Sector
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Allocation (%)
Financial Services
21%
Manufacturing
14%
Fisheries
13%
Building Supplies/Construction
13%
Renewable Energy
11%
Food and Beverage
10%
First Nations
7%
Logistics
7%
Other
4%
Total
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Sprott Asset Management LP
Sprott Bridging Income Fund LP
Performance
 Add distributions paid
Monthly Returns of Sprott Bridging Income Fund LP Reference Series of Class A
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
2015
0.91%
0.61%
0.67%
0.51%
0.64%
0.56%
0.83%
0.70%
2014
0.68%
0.71%
0.82%
0.68%
0.64%
0.68%
0.75%
0.74%
0.87%
0.81%
0.67%
0.86%
9.28%
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
YTD
-
-
-
-
-
-
-
-
-
-
0.11%
0.63%
0.74%
2013
SEP
OCT
NOV
DEC
YTD
5.56%
As at August 31, 2015. November 2013 returns are from November 21, 2013 inception date.
Compounded Returns of Sprott Bridging Income Fund LP Reference Series of Class A
1 MTH
3 MTH
6 MTH
1 YR
INCEPTION
0.70%
2.10%
3.97%
8.99%
8.83%
As at August 31, 2015
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Sprott Asset Management LP
Sprott Bridging Income Fund LP
Value Proposition
Why Borrowers choose Bridging Finance
Financing Flexibility
> We provide flexible financing solutions to companies that
may be overlooked or underappreciated by larger financial
institutions. We act quickly and are very responsive to
Borrower requirements.
Deal Sourcing
> Management has strong contacts in financial institutions,
legal community, accounting firms and in industry which
provide a constant flow of new opportunities.
Professionalism and Reputation
> We maintain high standards of professionalism and have
developed a strong reputation earned through providing a
positive experience for advisors, and clients; and
maintaining the highest standards of integrity and
professionalism of conduct.
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Sprott Asset Management LP
Sprott Bridging Income Fund LP
Sprott Bridging Income Fund LP
Offering Overview
Summary of Sprott Bridging Income Fund LP Offering
Fund Status
OM, Exempt Market, Continuous Offering
For Accredited Investors, $5,000 minimum
$150,000 pursuant to minimum amount investment exemption
Minimum Investment
Trailer Fees
1% per annum, paid monthly Class A
Class A Limited Partnership Units (basic accounts)
Class F Limited Partnership Units (fee-based accounts)
Class I Limited Partnership Units (institutional accounts)
Securities
Distributions
Monthly
Redemptions
Monthly with 30 days notice
Management Fee
Class A Units: 2%
Class F Units: 1%
Class I Units: Fee determined by agreement between the Manager and Subscriber of Class I Units
Performance Fees
See Offering Memorandum
Risk Protection
Interest Rate Protection
If target minimum yield is not met, the applicable portion of the Management Fee net of dealer fees will be
waived until the target minimum yield is reached
The Target Minimum Yield and Hurdle Rate will fluctuate with movements in the Prime Rate
FundSERV
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Contact your Sprott Sales Representative for Fund Codes
Sprott Bridging Income Fund LP
Contact Information
Sprott Asset Management LP
Royal Bank Plaza, South Tower
200 Bay Street
Suite 2700, PO Box 27
Toronto, ON M5J 2J1
T: 416 943 6707
Toll Free: 866 299 9906
F: 416 943 6497
Email: [email protected]
Web: www.sprott.com
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@Sprott
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Sprott Bridging Income Fund LP