A record expansion of private credit investment across the Caribbean region has been attributed to the stellar financial performance of Sygnus Credit Investments (SCI) for its 2020 financial year, which ended on a high on June 30.

SCI, which is regarded as the Caribbean’s leading alternative investment management company, reported record core revenues and core earnings in 2020. At the same time, the Kingston-based company experienced marginally lower than record net profits for the financial year under review.

Sygnus Capital Investments disclosed that private credit investments across the Caribbean region grew by 57.8 per cent to US$53.60 million invested in 25 portfolio companies. Executive Vice-President & Chief Investment Officer Jason Morris noted that the strong growth by SCI in private credit investments across the Caribbean was in keeping with its mandate to drive the velocity of financing for middle-market companies.

This was done via the alternative investment channel.

“The results were in part impacted by the one-off conversion of $1.2 billion to USD being part proceeds of new JMD debt that was raised and part proceeds of JMD investments that were exited during the third quarter,” Morris explained.

SCI investments are well-diversified across 10 key industries and seven territories including Jamaica, St Lucia, Cayman Islands, The Bahamas, Barbados and the ABC Islands. The company stated that this level of diversification is particularly important given the projected decline in Caribbean economies over the next 12 months due to the effects of COVID-19.

“In addition, the deliberate strategy around spreading investments across multiple industries and jurisdictions not only ensures resilience of the company’s private credit portfolio, but represents the significant progress it has had in providing medium-sized firms access to customised financing solutions over the last three years,” Sygnus reported.

DIVIDENDS UP 26%

Given the tremendous financial performance in spite of all the odds, the company has declared an interim dividend of US$870,900 or US$0.00249 per share. This has resulted in a 26 per cent increase in total dividend year-over -year.

The dividend will be paid on October 16, 2020. Total dividends declared/ paid for 2020 amounted to US$1.87 million up from the US$1.48 million paid in 2019. The earning per share for 2020 was 0.56 US cents.

SCI has reiterated its commitment to rewarding investors with increase and sustainable dividend payments in line with its solid performance especially in an environment when the general equities market has pulled back. Currently Sygnus boast one of the highest dividend yields on the Jamaica Stock Exchange (JSE).

ESCALATED RISK IN CURRENT ENVIRONMENT

The current environment encompasses a degree of escalated risk and opportunities in the credit market. However, alternative investors such as SCI with flexible capital are designed for these moments and as early as March this year, it has been working closely with its clients to manage current exposure or to support portfolio companies, which are well-positioned to take advantage of evolving opportunities.

The firm said it is very confident that given its disciplined investment strategy, its knowledge of the markets and with its deal structuring expertise, “SCI will be able to preserve the credit quality of its private credit portfolio and continue to deliver shareholder’s value in the medium term.”

For his part, Berisford Grey, president & CEO, declared, “as the regional leader in private credit investments, SCI remains optimistic on the medium- to long-term prospects for middle-market companies and believes that they will need to be resilient , prudent and innovative to survive the current disruptive environment. SCI will also seek to raise new capital to further strengthen its balance sheet, provide additional liquidity buffer, increase capital accessibility and act as a risk-conscious enabler in supporting the likely transformation of medium-sized business emanating from the current environment.”

He added that SCI’s investment strategy is anchored in robust risk management, partnership, and expertise thus striking a firm balance between the creation of shareholders’ value and downside protection.