Multisector
alternative credit portfolio helps investors meet income needs
through exposure to less-accessible segments of US credit
market
First Eagle Investments (“First Eagle”) today announced that
total assets under management in the First Eagle Credit
Opportunities Fund (A-Share Class: FECAX; I-Share Class: FECRX) had
eclipsed the $350 million threshold approximately 18 months since
its launch. The Fund seeks to provide current income with a focus
on delivering attractive risk-adjusted returns over the long term
through a multi-sector portfolio that invests primarily in private
and public alternative credit assets. As of December 31, 2021, the
Fund’s distribution yield was 7.09%.*
“We are excited to have seen such broad interest in the Credit
Opportunities Fund by retail financial professionals and their
clients,” said Jack Snyder, Jr., National Sales Manager, Wirehouse
and RIA Channel and Head of Retail Alternative Investments at First
Eagle. “With traditional fixed income investments continuing to
offer low yields but high risks given the rising-rate environment,
alternative credit assets may represent an attractive option for
those seeking income. The structure of the Credit Opportunities
Fund—complemented by education and training tailored specifically
for financial professionals—enables us to offer an
institutional-quality solution in the retail channel, and we’re
happy with the demand we’ve seen.”
As a closed-end interval fund registered under the Investment
Company Act of 1940, as amended, the Credit Opportunities Fund
provides investors with quarterly liquidity, giving the portfolio
managers greater flexibility to invest in alternative
income-generating assets like private credit and syndicated loans
that historically have offered higher yields relative to
traditional securities in exchange for reduced liquidity. At the
same time, the Fund is offered for sale continuously at NAV, like
an open-end mutual fund, and is available to a broad audience with
no requirements that investors be accredited or qualified.
“We appreciate the support of our early investors in the Credit
Opportunities Fund,” said Chris Flynn, President of First Eagle
Alternative Credit. “As the investment environment in general grows
more complicated, we expect deep credit research and prudent
investment selection will be key to success in the alternative
credit space. We’re pleased to leverage our team’s extensive market
experience to provide this ‘core’ alternative credit strategy to
retail investors and their financial professionals as they consider
the role such assets can play in a traditional allocation.”
* The Fund intends to declare income dividends daily and to
distribute them monthly at rates intended to maintain a more stable
level of distributions than would result from paying out amounts
solely based on its current net investment income. This is managed
by paying out less than all of its net investment income or by
paying out undistributed income from prior months, with any
potential remaining deficiencies characterized as a return of
capital at yearend. To date, the distribution yield has only been
derived from the Fund’s net investment income and has not included
borrowed funds or a return of capital. The distributions might not
be made in equal amounts, and one month’s distribution may be
larger than another. Distribution yield presented excludes any
special dividends, is based on the fund-level composite of all
share classes, and indicates the annual yield received if the most
recent composite Fund monthly distribution paid was the same for an
entire year. The yield represents a distribution and does not
represent the total return of the Fund. Because the Distribution
Yield is annualized from a single month’s distribution, no investor
actually received the yield in a given year. The yield is
calculated by annualizing the most recent composite monthly
distribution paid by the Fund and dividing it by the Fund’s average
month-to-date NAV from the as-of date.
About First Eagle Investments
First Eagle Investments is an independent, privately owned
investment management firm headquartered in New York with
approximately $110.5 billion in assets under management as of
December 31, 2021. Dedicated to providing prudent stewardship of
client assets, the firm focuses on active, fundamental and
benchmark-agnostic investing, with a strong emphasis on downside
mitigation. With a heritage dating back to 1864, First Eagle has
helped its clients avoid permanent impairment of capital and earn
attractive returns through widely varied economic cycles—a
tradition that is central to its mission today. The firm’s
investment capabilities include equity, fixed income, alternative
credit and multi-asset strategies. For more information on First
Eagle, please visit www.firsteagle.com. For information on the
Alternative Credit team at First Eagle, please visit
www.feac.com.
The Credit Opportunities Fund (the “Fund”) is a closed-end
Interval Fund, a type of fund that, in order to provide liquidity
to shareholders, has adopted a fundamental investment policy to
make quarterly offers to repurchase between 5% and 25% of its
outstanding Common Shares at net asset value (“NAV”). Subject to
applicable law and approval of the Board of Trustees for each
quarterly repurchase offer, the Fund currently expects to offer to
repurchase 5% of the Fund’s outstanding Common Shares at NAV on a
quarterly basis.
An investment in the Fund is not suitable for investors who need
certainty about their ability to access all of the money they
invest in the short term.
Investors should consider Common Shares of the Fund to be an
illiquid investment. There is no guarantee that investors will be
able to sell the Common Shares at any given time or in the quantity
the investor desires.
The Fund’s Common Shares are not listed for trading on any
national securities exchange, have no trading market and no market
is expected to develop.
Risk Disclosures:
An investment in the Fund involves a number of significant
risks. Before you invest, you should be aware of various risks,
including those described below. For a more complete discussion of
the risks of investing in the Fund, see the Fund’s prospectus under
the heading, “Principal Risks of the Fund.”
All investments involve the risk of loss of principal. The Fund
may not be able to pay distributions or may have to reduce
distribution levels if the income and/or dividends the Fund
receives from its investments decline.
Investment in private and middle market companies is highly
speculative and involves a high degree of risk of credit loss, and
therefore the Fund’s securities may not be suitable for someone
with a low tolerance for risk. The Fund is required to rely on the
ability of the First Eagle Alternative Credit’s investment
professionals to obtain adequate information to evaluate the
potential returns from investing in these companies.
Below investment grade securities or comparable unrated
instruments may be subject to greater risks than securities or
instruments that have higher credit ratings, including a higher
risk of default, and the Fund might have difficulty selling them
promptly at an acceptable price.
Investments in loans potentially expose the Fund to the credit
risk of the underlying borrower, and in certain cases, of the
financial institution. The Fund’s ability to receive payments in
connection with the loan depends primarily on the financial
condition of the borrower. Even investments in secured loans
present risk, as there is no assurance that the collateral securing
the loan will be sufficient to satisfy the loan obligation. The
market for certain loans is expected to be illiquid and the Fund
may have difficulty selling them. In addition, loans often have
contractual restrictions on resale, which can delay the sale and
adversely impact the sale price.
Investments in debt securities and other obligations of
companies that are experiencing significant financial or business
distress involve a substantial degree of risk, including a material
risk that the issuer will default on the obligations or enter
bankruptcy. The level of analytical sophistication, both financial
and legal, necessary for successful investment in distressed assets
is unusually high. There is no assurance that First Eagle
Alternative Credit will correctly evaluate the value of the assets
collateralizing the Fund’s investments or the prospects for a
successful reorganization or similar action in respect of any
company.
The opinions expressed are not necessarily those of the firm and
are subject to change based on market and other conditions. These
materials are provided for informational purposes only. These
opinions are not intended to be a forecast of future events, a
guarantee of future results, or investment advice. Any statistics
contained herein have been obtained from sources believed to be
reliable, but the accuracy of this information cannot be
guaranteed. The views expressed herein may change at any time
subsequent to the date of issue hereof. The information provided is
not to be construed as a recommendation or an offer to buy or sell
or the solicitation of an offer to buy or sell any security. The
information in this piece is not intended to provide and should not
be relied on for accounting, legal, and tax advice.
FEF Distributors, LLC (“FEFD”) distributes First Eagle products;
it does not provide services to investors. As such, when FEFD
presents a strategy or product to an investor FEFD and its
representatives do not determine whether the investment is in the
best interests of, or is suitable for, the investor. Investors
should exercise their own judgment and/or consult with a financial
professional prior to investing in any First Eagle strategy or
product.
First Eagle Investments is the brand name for First Eagle
Investment Management, LLC and its subsidiary investment advisers.
First Eagle Alternative Credit is the brand name for those
subsidiary investment advisers engaged in the alternative credit
business.
Investors should consider investment objectives, risks,
charges and expenses carefully before investing. The prospectus and
summary prospectus contain this and other information about the
Funds and may be obtained by visiting our website at
www.firsteagle.com or calling us at 800.334.2143. Please read our
prospectus carefully before investing. Investments are not FDIC
insured or bank guaranteed, and may lose value.
First Eagle Credit Opportunities Fund is offered by FEF
Distributors, LLC, a subsidiary of First Eagle Investment
Management, LLC, which provides advisory services.
© 2022 First Eagle Investment Management, LLC. All rights
reserved
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Media Contacts Mount and Nadler Hedda Nadler
hedda@mountandnadler.com 212-759-4440
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