NCB Cap Markets STRATUS to the rescue of Caribbean

NCB Cap Markets STRATUS to the rescue of Caribbean

STRATUS alternative funds could be capitalised by as much as US$76M

BY DURRANT PATE
Observer Business Writer

Wednesday, December 02, 2020

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NCB Capital Markets is targeting upwards of US$76 million dollars in alternative financing at Caribbean businesses and regional governments through its STRATUS alternative funds.

STRATUS, which is being described by NCB Capital Markets as the future of financing in the region, is based in Barbados having been recently established there. It is designed to provide a sleeve of investment solutions under one umbrella group.

STRATUS has been set up as a set of segregated self-funds with the aim of providing a broad range of alternative investment solutions for financing in the Caribbean.

At present, there are two funds under the STRATUS architecture, an infrastructure fund, which was seeded from a US$10 million private placement last month and the Caribbean Mezzanine Fund (CMF1), which is an extension of NCB Capital Market's partnership with investment company, Eppley.

A third fund will be launched in the coming weeks, which NCB Capital Market Assistant Vice-President (AVP) for Alternative Investment and Fund Management Simone Hudson Bernard explained would be an opportunity fund that will focus on various assets that may be in distress and in need of financing solutions to turn them around.

Speaking at last Monday's Observer Business Forum, Hudson Bernard disclosed that plans are being put in place for additional funds to be launched in the future, “because we want to create a holistic alternative financing vehicle so that investors here in Jamaica and the rest of the region can have access to higher returns”.

NCB Capital Markets Chief Executive Officer Steven Gooden, told Observer business journalists that the US$10- million private placement was taken up by people who he described as “friends and family” of NCB Capital Markets. Pointing out that the focus for this quarter will be the launching of the second iteration of the CMF, referred to as CMF2, Gooden would not be drawn into giving much detail.

Hudson Bernard explained that “CMF2 is targeting a minimum private placement of US$40 million; we have the ability to upsize that amount to US$60 million. So CMF1 started with a portfolio of US$16 million, when you add that to the upper end of the funds raised, you are looking at a fund size of US$76 million.” Looking down the road, the NCB Capital Markets AVP pointed to the possibility of raising more funds under STRATUS via an initial public offer of shares.

STRATUS'S 3 PILLARS OF OPERATION

Hudson Bernard informed that the three pillars upon which STRATUS stands were access, diversification and strong governance.

“When we speak of access, we mean investors have access to investments that now makes sense and we will provide more attractive returns, but then businesses are in need of financing on the other end. They will have access to this patient, flexible capital as well,” she explained.

The investment banker reported that what stands out most about STRATUS is the governance structure underpinning the formation and the future of the alternative investment vehicle, designed to transform financing regionally while allowing regional and international investors to invest in the Caribbean. Declaring that the board is strong, pointing out that NCB Capital Markets was “careful in putting the board together”.

The board is chaired by attorney, Sanya Goffe, president of the Pension Industry Association of Jamaica, and comprises chancellor of The University of the West Indies, Robert Bermudez and Misha Lobban-Clarke, executive director of the Barbados Chamber of Commerce. Also on the board are NCB Managing Director Patrick Hylton and his deputy, Dennis Cohen.

There is one post left to be filled on the board, which is seeking to fill the position with an investment banker experienced in financing for emerging markets.


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