SPR & Co LP is a new operating company created assuming portfolio management of the Canadian diversified assets of Sprott Asset Management LP. Sprott Private Credit Trust (SPCT) is also merging into Sprott Private Credit Trust II (SPCT II) with the combined fund renamed as Sprott-TEC Private Credit Fund.With the changes, the new fund is no longer tax sheltered as the forward contract has ended - this means a capital gain for the unit holder in 2017. The merger FAQs indicate some of the reasons for the changes:
1) To simplify ownership structure for the relevant assets
2) To ensure unitholders’ tax liability in SPCT is in line with their economic benefit in the
same tax year.
3) To potentially lower annual fixed costs to unitholders of SPCT and SPCT II, as the merger
would increase assets under management in the remaining fund.
Returns on the trust have been steady (see example table below) and with the same sub-advisor can be expected to continue :
The following sums up how private lending decisions are made:
Investment Criteria for Private Credit Loans
| VALUABLE ASSET COLLATERAL | Senior liens on self-liquidating working capital assets and critical business assets with realizable liquidation values |
| PROVEN BUSINESS MODEL | Sound business strategy with visible product demand and capacity for cash flow generation to limit default risk |
| STRONG MANAGEMENT | Experienced management teams committed to business and aligned through personal risk and ownership |
| STAKEHOLDER SUPPORT | Strong customer, supplier, employee, junior creditor, and/or shareholder relationships |
| MULTIPLE EXITS | Wide range of deleveraging options not dependent on refinancing or collateral realization and liquidation |
Fund details are available here. The fund is now open for new investments.
