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Companies looking for Capital

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Companies looking for Capital

Provide access to senior secured convertible asset-based loans to public North American small cap companies.

Overview:

  • Top-down industry analysis used to identify favorable sectors based on present macro themes
  • Senior secured convertible loans with the ability to convert to publicly traded common shares
  • Generate synergies and value by assisting borrowers on growth and acquisition plans
  • Convertible loans allow for investors to participate on upside to growing industries in rising markets.

Capital Protection:

  • Fully supported by sufficient collateral and senior liens on critical assets of the borrower with a preference for self liquidating collateral
  • Disciplined underwriting and monitoring process to ensure capital protection
  • Additional loan security including corporate/personal guarantees, confession of judgement and blocked accounts.

Capital Allocated For A Variety Of Uses:

  • Growth Capital
  • Merger & Acquisition
  • Working Capital/Bridge Financing
  • Ownership Transfers/MBOs
  • Project Financing
  • Acquisition Lines
Sector and Asset Allocation

* Excludes working capital
*For illustrative purposes only.
**Loan to enterprise value
†After the first twelve months
Market Opportunity

The growth in passive investments, ETF’s and other factors has resulted in large amounts of capital chasing a very small number of stocks. For example, $1,000 invested in XIC (TSX ETF) means that about $386 would be allocated to the top 10 stocks, $236 to the top 5 and $0.50 to the bottom 5 stocks.

  1. Focus on publicly listed companies sub $100 million market capitalization
    AIP alpha generated by the following: helping with M&A, capital market expertise, increased liquidity since they are a larger company which may result in higher share prices.
  2. Large Potential Market – over 20,000 publicly listed companies with market cap less than $100 million
  3. Private Debt (Senior Secured Convertible Debt) into public companies
    AIP strategy – downside protection with upside participation.

Major Equity Indices – Concentrated in a Few Stocks

This information is presented solely for illustrative purposes.
Small to Micro-Cap Financing Alternatives
Fund Performance (%)*

As of December 31, 2020

*Class A
**Effective January 22, 2020, AIP Global Macro Fund LP name changed to AIP Convertible Private Debt Fund LP
*** SIRR of 36% comprised of 12% Coupon and 24% Equity Upside
The indicated rates of return are the historical annual compounded total returns including changes in share value and reinvestment of all dividends. Please refer to the Disclaimer for additional information.
Our Investment Process


Identify sectors that are based on present macro themes and target debt financing.


Identify companies in attractive sectors that require short term financing, then screen for companies with attractive prospects for success, strong management teams and utilize assets to secure debt.


Negotiate loan terms without limitation securing loans with assets. Loans required are either convertible to shares or an additional royalty and equity warrant is needed.


Monitor companies we have lent money to until exit. Monitoring is pro-active with periodic discussions with management, site visits and field examinations if required.


Convert loans to shares and sell, or stay in loans and collect interest, depending on the environment and the market performance of the borrower.

Target Transaction Type – Acquisition Line
This information is presented solely for illustrative purposes.

Thesis Overview:

  • Private companies can be bought out at 6-10x EPS while publicly traded peers S&P trades at 21x;
  • Companies which had strong fundamentals prior to COVID-19 should rebound and resume trading at higher multiples;
  • By targeting a hold period between 12 and 24 months, convertible debt investors can earn outsized returns by supporting acquisitions during this time of temporary turmoil with relatively low risk and volatility without operational overhauls.
  • Target companies with strong management teams, strong growth profiles;
Loan Origination and Financing Process


Click here to view the full size chart.

Timeline begins at start of signed Term Sheet.
*Effective January 22, 2020, AIP Global Macro Fund LP name changed to AIP Convertible Private Debt Fund LP
Saxo (the “Administrator”) has retained Ninepoint Partners LP (“Ninepoint”), to provide exempt market dealer, distribution and marketing services on an exclusive basis with respect to the offering of the Class A Shares and the Class F Shares for AIP Convertible Private Debt Fund LP (the “Fund”).