Private debt managers in Europe tend to share three goals: to expand geographically within European territories; to target large companies with an enterprise value of more than $400m; and they tend to mix high and low-risk investments within funds in the hope of making bigger returns.
Insurance Asset Risk Awards judges gave the "Private debt manager of the year" title to one company that goes against the grain.
Pemberton is an asset management firm that has adopted an alternative model, focusing exclusively on mid-market companies with a value of less than $400m and transactions with debt of between $50m and $200m.
It was established as a pan-European firm in 2013 with local representatives.
Most importantly, it keeps the low and high risk assets separated.
Paul Sullivan, head of insurance strategies at Pemberton, explains that the firm holds a senior secured fund and a subordinated fund, but the risks are not mixed between these two.
"The investors choose to put their money on one fund or the other," he says. "This is because we're focusing on raising capital from insurance companies; especially under Solvency II they want to understand the underlying risk of the portfolio."
Pemberton also provides credit ratings for each of the loans its clients invest in. "We have our own internal model and we provide investors reports on a quarterly basis with a rating," Sullivan says.
That said, Pemberton is planning to extend its credit offer further into new strategies. "Firms will be able to borrow in a range of ways based on their financing requirements, and investors will have a choice in how they deploy capital based on their maturity and risk appetite," Sullivan adds.