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Sagard Private Credit Fund
Sagard Private Credit Fund
Your private credit solution
Institutional-calibre private credit for Canadian accredited investors
The Sagard Private Credit Fund harnesses Sagard’s institutional-calibre private credit expertise to provide Canadian accredited investors with the opportunity to participate in this attractive asset class. It will seek to generate attractive, stable returns driven largely by interest income earned on a broadly diversified portfolio of private loans. Initially, the fund is expected to generate indicative annual net returns of 9-10%1.
Why Invest In Private Credit?
Private credit is one of the fastest-growing private asset classes, forecast to grow to $2.3 trillion in assets globally by 2027.2 Investors are increasingly adding private credit to their portfolios, given that it can deliver higher returns with lower volatility than most other fixed income alternatives.3
Contact UsExplore the potential of private credit
Sagard Private Credit Fund offers a number of attractive features
Monthly distributions, driving initial indicative annual net returns of 9-10%[1]
Capital preservation & NAV stability with senior secured, first-lien priority
Convenient evergreen structure with monthly subscriptions & quarterly liquidity
Inflation protection via floating-rate loans
Currency hedged to CAD$ to minimize foreign exchange risk
Advantageous tax treatment thanks to eligibility for registered plans such as RRSPs, RESPs, TFSAs and more
Portfolio Snapshot
Portfolio Construction
- North American Mid-Market focus, with up to 20% of the portfolio in Western Europe & Australia.
- Non-sponsor finance focus: we lend directly to companies (as opposed to transacting through a private equity firm) to optimize the rate we charge borrowers and the protections we can obtain for investors
- 60-65% run-rate4 allocation to direct private loans
- Target EBITDA range $5-500M
- Target loan size of 1-2% of the portfolio with 10% maximum
Three Major Asset Types
- Direct private credit originated by Sagard. Sagard focuses on senior loans to seek to minimize default risk as much as possible. These terms are designed to ensure the loans get paid back first if the company gets in trouble.
- Asset-based lending, where a company borrows money using its assets, like inventory, accounts receivable, or equipment, as collateral. Sagard may also invest in CLOs, a financial instrument where a pool of loans is bundled together.
- Broadly syndicated loans (BSLs) which are large liquid loans provided by a group, or syndicate, of lenders to a single borrower.
Overview Materials
Our Values
Our leadership, partners and team share the same commitment to our culture anchored around core values.
Learn MoreFAQs
Broadly defined, private credit is lending by non-bank institutions. The borrower may be a public or private company that requires financing. The loans can be related to growth, M&A, or if a company just needs more capital. Generally, the borrower doesn’t have access to traditional bank financing and/or might prefer to work with a lender who can offer more flexible terms. For the investor, private credit offers the potential for higher return and increased protections vs. traditional fixed income, thanks to more tightly negotiated terms, covenants and pricing.
The Fund will tap into a robust funnel of senior secured, first-lien loan opportunities that the Sagard team rigorously diligences across its institutional product shelf. Like other Sagard Credit products, the Fund will focus on direct lending to North American middle market companies. In our view, the space is seeing fewer lenders given the banks have less flexibility in lending these days, which creates opportunities for enhanced pricing and improved protections.
The Fund is expected to generate an initial indicative net return of 9-10% per year over an investment cycle, comprised mostly of distributions. This rate is not a target and is provided on an indicative basis only.
Class F Units have a management fee of 1.5% p.a. of NAV. Class A Units have a management fee of 2.5% p.a. of NAV (including 1.0% advisor servicing fee). Class X Units have a reduced management fee of 1.2% p.a. of NAV and are available for a limited period. Units have a quarterly performance fee of 15% subject to 1.25% total return soft hurdle with high water mark.
Private credit is not suited for all investors but can be a great choice for those who will not need their money back in the short-term and whose portfolios can handle some risk. The private credit fund is open to Canadian accredited investors, institutional investors, family offices, and qualified high-net-worth individuals who meet certain eligibility criteria and risk profile suitability.
The minimum first-time investment is CAD$25,000; subsequent investments must be a minimum of CAD$500.
The Fund has built in some liquidity to make investing in private credit more user-friendly for individual investors. Clients and advisors can subscribe on a monthly basis, while the Fund will target paying monthly distributions. If you choose to withdraw your investment, redemptions will be accepted quarterly. However, investors will not be able to withdraw their capital on demand once it’s invested. There are limits to these redemptions: they require significant notice, and it takes time to pay out the funds. Redemptions may be subject to early redemption fees or suspended altogether.
Footnotes
- Indicative initial annual return of 9-10% over an investment cycle, consisting mainly of distributions
- Preqin Special Report: The Future of Alternatives in 2027
- Goldman Sachs, “Balancing Act: Building Private Credit Portfolios” (Oct 2023); Bloomberg, “Investors to Increase Allocation to Private Credit” (Dec 2023)
- Run-rate expected at 12 months post launch
Disclaimers
Statements on this page are based on the subjective views and opinions of Sagard and cannot be independently verified. There can be no assurance any returns or yields are achieved or that financial exchange risk is minimized. There can be no assurance any distributions are made to investors. Target returns are hypothetical and do not reflect actual returns to any Sagard client or investors. There can be no assurance that any target returns are achieved.] Actual returns may be materially lower. There can be no assurance an investor can redeem from the Sagard Private Credit Fund. Please refer to the fund’s organizational and offering documents for additional details. Targeted investment characteristics may not be indicative of future investment characteristics and there can be no assurance that the Fund will have comparable investment characteristics or that target investment characteristics will be achieved. Like all investments, an investment in the funds advised by Sagard involve significant risks, including loss of the entire investment. Investment products such as the funds advised by Sagard are designed only for sophisticated investors who are able to sustain the loss of their investment. Accordingly, such investment products are not suitable for all investors. The funds advised by Sagard are not subject to the same or similar regulatory requirements as mutual funds or other more regulated collective investment vehicles. This presentation does not constitute or form part of an offer to issue or sell, or of a solicitation of an offer to subscribe or buy any securities, nor does it constitute investment advice or a recommendation. Certain information contained in this presentation constitutes “forward-looking statements.” Due to various risks and uncertainties, actual events or results or the actual performance of any Sagard investment may differ materially from those reflected or contemplated in such forward-looking statements.
This document or material (this “document”) is directed only to Canadian residents that are “accredited investors” as defined under section 1.1 of National Instrument 45-106 Prospectus Exemptions and “permitted clients” as defined under section 1.1 of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations. This document is not, and under no circumstance is to be construed as an offering memorandum, an advertisement or a public offering of any securities described herein in any province or territory of Canada (each, a “Canadian Jurisdiction”). Under no circumstances is this document to be construed as an offer to sell securities or the provision of advice in relation to any securities. Any offer or sale of any securities described in this document will be made pursuant to the definitive private placement documents for the securities, which do not include this document. In addition, any offer or sale of, or advice related to, any securities described in this document will be made only by a dealer or adviser registered or relying on an exemption from registration in the applicable Canadian Jurisdiction. No Canadian securities regulatory authority has reviewed or in any way passed upon the information contained in this document or the merits of any securities described in this document, and any representation to the contrary is an offense.
