About
Arbitrium is a specialist fund manager than invests in event-driven special situations transactions. Arbitrium specialises in actively investing in mid-market Australian corporate credits that have strong underlying fundamentals but are unable to continue to attract traditional funding sources.
Arbitrium takes an active role in the turnaround of the borrower’s business to restore and create additional value. Arbitrium uses equity warrants to capture the upside.
Arbitrium invests in debt which is secured by collateral (property, plant and equipment, cash, receivables) including senior secured loans, secured subordinated loans, uni-tranche loans and hybrid loans (convertible) loans. We can invest in pre-restructure and post-restructure debt, subject to our assessment.
Our Investment Philosophy
We target fundamentally strong but under-serviced corporates
We provide liquidity to an under-serviced segment of the corporate market
Through market cycles, a number of mid-market Australian corporates which were previously financially sound, and able to service their debt, may experience financial hardship and require new sources of capital to see them through to recovery.
Mid-market Australian corporates with non-investment grade secured loans of $20m to $100m are currently under-serviced by banks.
We strive for value creation
Arbitrium specialises in actively investing in mid-market Australian corporate credits that satisfy our ESG policy and have strong underlying fundamentals but are unable to continue to attract traditional funding sources.
Arbitrium takes an active role in the turnaround of the borrower’s business to restore and create additional value. Arbitrium uses equity warrants to capture the upside.
Availability of downside protection is a key focus of our credit assessment process
Arbitrium has a team with over 70+ years of combined experience in distressed debt, funds management and corporate turnarounds through numerous credit cycles. Downside protection (through collateral) is always our key focus.
The team at Arbitrium have advised on some of the most complex corporate debt restructures in Australia and helped them achieve operational excellence.
Why Invest With Us
Having worked with numerous complex transactions allows us to structure a credit deal which provides risk-adjusted returns for our investors.
STRONG TEAM WITH THE RIGHT EXPERIENCE
Experienced in distressed credit, financial restructuring, funds management, M&A and turnaround management through numerous credit cycles with the team having managed 200-300 loans across in Australia and New Zealand.
STRONG CREDIT RISK ASSESSMENT EXPERTISE
Strong credit risk assessment expertise to ensure limitation of downside risk. We conduct our own credit assessments and do not outsource it to advisors. Our risk rating system captures all qualitative and quantitative assessments (including an ESG assessment) of the borrowers. We only lend into situations with availability of some collateral such as; cash, property, plant and equipment, inventory or receivables, to ensure there is some recourse to mitigate downside risk in a default scenario.
WE SOURCE QUALITY DEALS
We can source quality deals not encumbered with a portfolio of underperforming loans written pre-COVID-19.
WE OFFER DIVERSIFICATION IN PORTFOLIOS WITH HIGHER RETURNS
We offer investors diversification in their portfolio and access to higher returns in a market with low returns and uncertainty.
KEY DRIVERS OF VALUE
In-depth understanding of the key drivers of value and ability to undertake strong due diligence to tailor the investment solution to achieve the desired returns
Our Approach
We structure the funding solution to assist Borrowers to first stabilise and turnaround, and then grow the business.
STRATEGISE & CREDIT STRUCTURING
Understand the Borrower’s business, the root causes of the problems in the business and identify the funding requirement.
Structure a facility that is suitable and sustainable by the Borrower.
TURNAROUND AND STABILISE
Partner with the Borrower to use the funding to stabilise the business.
Develop a feasible and achievable turnaround plan.
Facilitate growth and improve the Borrower’s enterprise value thereby improving returns for Arbitrium and its investors.