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Investment Model

AGL is a fundamentals based long-term investor with a three-part investment model targeting safety plus robust risk adjusted cash returns across all phases of credit cycles and market conditions.

AGL's Investment Objectives

  • Defensive “all-weather” annuity-like cash-on-cash absolute return
  • Preservation of invested capital through minimal loss incidence and dispersed over time if incurred
  • Alpha contribution to asset class from superior risk-adjusted returns
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AGL’s Differentiated Three-Part Investment Model:

  • Eligibility criteria
    • Ability to repay at par under duress
    • Appropriate risk adjusted return
    • Acceptable structure and documentation
  • Enabled by proprietary private side analytics
    • Enabled by private side information including 5-year projections
    • Access to management and sponsors during life of investment
    • Bank-like underwriting approach and “DNA”

  • The four dimensional “4-D” diversification criteria
    • 1st D: Classification of borrower’s sensitivity to business cycle are the basis for portfolio construction and management
      • A: A-recessionary; B: Beta; C: Cyclical
    • 2nd D: Seek borrowers with idiosyncratic attributes to maximize “sibling” differentiation and minimize intra-portfolio correlation (1 – idiosyncratic, 2 – somewhat similar, 3 – similar)
    • 3rd D: Industry inclusion / exclusion + weightings with hard caps
    • 4th D: Create more uniform position sizes over time to target levels based on internal risk ratings and risk-adjusted returns
  • Fund portfolios hold 250-300 BSLs
    • target 50% A-recessionary loans

  • Continuously increase value of each fund relative to invested capital by creating reserves / “building par” + improving credit quality
  • Prioritize BSL new issue with accretive OID
  • Opportunistic relative value secondary purchase and sale “swaps” arbitraging valuation variance and volatility
  • Risk management actions as warranted

A powerful and differentiated platform, with experienced leadership and innovative strategies in senior secured corporate credit loans.

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