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Contact Next Edge Capital

1 Toronto Street, Suite 200
Toronto, ON M5C 2V6

Telephone: 416.775.3600
Toll-free: 1.887.860.1080
Fax: 416.775.3601
Email: info@nextedgecapital.com

Next Edge Private Debt Fund

Next Edge Private Debt Fund

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Are You An Accredited Investor?

If you meet the definition “accredited investor” (see below), you may invest a minimum of $25,000. Please consult the Offering Memorandum to determine your qualification status. Investment Advisors should consult their company’s internal policies.

The Subscriber, or one or more beneficial purchasers for whom the Subscriber is acting, is (i) a resident of, or the purchase and sale of securities to the Subscriber is otherwise subject to the securities legislation of one of the following: British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Québec, Newfoundland and Labrador, Nova Scotia, New Brunswick, Prince Edward Island, North West Territories, or Nunavut, and the Subscriber is (and will at the time of acceptance of the Subscription be) an accredited investor within the meaning of National Instrument 45-106 Prospectus and Registration Exemptions (“NI 45-106”) because the Subscriber is one of the following:

(a) except in Ontario, a Canadian financial institution, or a Schedule III bank;

(b) except in Ontario, the Business Development Bank of Canada incorporated under the Business Development Bank of Canada Act (Canada);

(c) except in Ontario, a subsidiary of any person referred to in paragraphs (a) or (b), if the person owns all of the voting securities of the subsidiary, except the voting securities required by law to be owned by directors of that subsidiary;

(d) except in Ontario, a person registered under the securities legislation of a jurisdiction of Canada as an adviser or dealer;

(e) an individual registered under the securities legislation of a jurisdiction of Canada as a representative of a person referred to in paragraph (d);
e.1 an individual formerly registered under the securities legislation of a jurisdiction of Canada, other than an individual formerly registered solely as a representative of a limited market dealer under one or both of the Securities Act (Ontario) or the Securities Act (Newfoundland and Labrador);

(f) except in Ontario, the Government of Canada or a jurisdiction of Canada, or any crown corporation, agency or wholly owned entity of the Government of Canada or a jurisdiction of Canada;

(g) except in Ontario, a municipality, public board or commission in Canada and a metropolitan community, school board, the Comité de gestion de la taxe scolaire de l’île de Montréal or an intermunicipal management board in Québec;

(h) except in Ontario, any national, federal, state, provincial, territorial or municipal government of or in any foreign jurisdiction, or any agency of that government;

(i) except in Ontario, a pension fund that is regulated by the Office of the Superintendent of Financial Institutions (Canada), a pension commission or similar regulatory authority of a jurisdiction of Canada

(j) an individual who, either alone or with a spouse, beneficially owns, directly or indirectly, financial assets, having an aggregate realizable value that before taxes, but net of any related liabilities, exceeds $1,000,000;

(j.1) an individual who beneficially owns financial assets having an aggregate realizable value that, before taxes but net of any related liabilities, exceeds $5 000 000.;

(k) an individual whose net income before taxes exceeded $200,000 in each of the two most recent calendar years or whose net income before taxes combined with that of a spouse exceeded $300,000 in each of the two most recent calendar years and who, in either case, reasonably expects to exceed that net income level in the current calendar year;

(l) an individual who, either alone or with a spouse, has net assets of at least $5,000,000;

(m) a person, other than an individual or investment fund, that has net assets of at least $5,000,000 as shown on its most recently prepared financial statements;

(n) an investment fund that distributes or has distributed its securities only to: (i) a person that is or was an accredited investor at the time of the distribution; (ii) a person that acquires or acquired securities in the circumstances referred to in sections 2.10 [Minimum Amount Investment ] and 2.19 [ Additional Investment in investment funds ] of National Instrument 45-106; or (iii) a person described in paragraph (i) or (ii) that acquires or acquired securities under section 2.18 [Investment fund reinvestment] of National Instrument 45-106;

(o) an investment fund that distributes or has distributed securities under a prospectus in a jurisdiction of Canada for which the regulator or, in Québec, the securities regulatory authority, has issued a receipt;

(p) a trust company or trust corporation registered or authorized to carry on business under the Trust and Loan Companies Act (Canada) or under comparable legislation in a jurisdiction of Canada or a foreign jurisdiction, acting on behalf of a fully managed account, managed by the trust company or trust corporation, as the case may be;

(q) a person acting on behalf of a fully managed account managed by that person, if that person is registered or authorized to carry on business as an adviser or the equivalent under the securities legislation of a jurisdiction of Canada or a foreign jurisdiction, and

(r) a registered charity under the Income Tax Act (Canada) that, in regard to the trade, has obtained advice from an eligibility advisor, or an advisor registered under the securities legislation of the jurisdiction of the registered charity to give advice on the securities being traded;

(s) an entity organized in a foreign jurisdiction that is analogous to any of the entities referred to in paragraphs (a) to (d) or paragraph (i) in form and function;

(t) a person in respect of which all of the owners of interests, direct, indirect or beneficial, except the voting securities required by law to be owned by directors, are persons that are accredited investors;

(u) an investment fund that is advised by a person registered as an advisor or a person that is exempt from registration as an advisor;

(v) a person that is recognized or designated by the securities regulatory authority or, except in Ontario and Québec, theregulator as: (i) an accredited investor; or (ii) an exempt purchaser in Alberta or British Columbia after September 14,2005; or

(w) a trust established by an accredited investor for the benefit of the accredited investor’s family members of which a majority of the trustees are accredited investors and all of the beneficiaries are the accredited investor’s spouse, a former spouse of the accredited investor or a parent, grandparent, brother, sister, child or grandchild of that accredited investor, of that accredited investor’s spouse or of that accredited investor’s former spouse.

Yes, I meet the criteria. No, I don’t meet the criteria.

OVERVIEW

PRIVATE LENDING: THE OPPORTUNITY

Private Lending: An Attractive Fixed Income Solution

In a low interest rate environment, investors are challenged to attain attractive yields from traditional fixed income assets. Private Lending may offer attractive solutions for yield and returns.

What is Private Lending?

  • Private Lending can be broadly defined as privately negotiated loans that take place outside of the traditional banking network.
  • There are many different areas of private lending with varying levels of risk/reward.

Benefits of Private Lending Investing

  • Strong historical return and cash flow characteristics relative to other fixed income vehicles.
  • Solid focus on preservation of capital.
  • Lower leverage ratios, greater asset coverage and stronger covenant typically than more liquid loan market.
  • Market inefficiencies have the potential to translate into higher yields for investors.
  • Low historical correlation to equity and bond markets.
  • Private loans, not market priced (minimal market volatility as compared to public equities and bonds).
  • Illiquidity Premium – for those investors that do not need the immediate liquidity of public markets, a premium is typically provided.

THE FUND

Fund Objective: The Next Edge Private Debt Fund (the ‘Fund’) aims to achieve consistent, risk-adjusted returns with minimal volatility and low correlation to most traditional asset classes by investing primarily in a diversified portfolio of private factoring and secured loan investments.

Investment Strategy: To achieve its investment objective the Fund will allocate capital to a select number of loan originators and credit advisors who are recognized leaders in the North American private lending marketplace.

The Credit Advisor: The Fund’s primary Credit Advisor is Liquid Capital Corp. (‘Liquid Capital’). Formed in 1999, Liquid Capital is a trade finance company focused on factoring and secured asset-based lending (‘ABL’). Since inception, Liquid Capital has funded over CAD $3 Billion* in receivables financing with the deal flow being equally split between Canada and the US.

*Source: Liquid Capital, as of December 31, 2018

Next Edge Private Debt Fund is focused on these areas of Private Lending:

Factoring:

  • Accounts receivable financing, commonly referred to as factoring, is an essential component of trade finance and has existed in developed economies for centuries.
  • Simply stated, factoring allows a company to improve its cash flow cycle through the sale of its accounts receivables to an outside party (the factor).
  • By converting accounts receivable into cash, a company increases both its productivity and financial health.
  • From an investor standpoint there is an inefficiency that can be received from the attractive yields charged to the client based on their often poor business credit; however, much security can be had from the end debtor (receivable).

Asset Based Lending:

  • Lending to businesses secured by an asset that acts as collateral for the loan.
  • These loans tend to be secured by receivables, inventory, real estate or equipment.
  • Attractive yields are available and are secured by real assets.

Specialty Lending:

  • Loans provided to non-bank lenders whereby the primary collateral/assets are the pool of loans.
  • These non-bank lenders provide consumer or business loans in a variety of areas ie. auto finance, POS retail consumer finance.
  • This area has been vastly growing due to technology driving efficiency & changing consumer behavior.

THE TEAM

The credit teams at Liquid Capital/Line Financial (primary credit advisor to the Fund) and Next Edge Capital have extensive private lending experience.

Download the Next Edge Private Debt Fund Presentation to learn more about our team.

Fund Type
Mutual Fund Trust
Inception Date
2015-06-01
Minimum Initial Investment
CAD $10,000 for Accredited Investors only
Purchases
Monthly
Redemptions
Monthly with 90 days notice
Management Fee
Class A
1.50% (1.00% servicing fee payable out of the MGMT fee)
Class F1
0.50%
Performance Fees
See Offering Memorandum
Valuation Pricing
Monthly
Distributions
8% per annum, paid monthly
Fund Codes (Interim – For Purchase)
Class A - NEC 448
Class F1 - NEC 442
Fund Codes (Final)
Class A - NEC 458
Class F1 - NEC 452