Canadian Wealth Manager Taps Demand For Private Debt

Robbie Lawther

3 November 2017

Canadian-based Nicola Wealth Management, which has C$5 billion in assets under management, has launched the NWM Private Debt Fund, tapping investor demand for non-public capital amid a thirst for yield.

This fund combines a fund-of-funds approach with a direct investment in private debt opportunities to earn an attractive premium above public market fixed-income yields and returns, the firm said in a statement.

Using this structure and philosophy, the NWM Private Debt Fund grows by looking at traditional private debt investments to seek high-income yield, low volatility, low fees, and liquidity, the firm said.

Some of NWM Private Debt Fund’s sub-managers include: Crown Capital Partners, Penfund, Oaktree and THL Credit.

Recent years have seen rising interest in the market for private credit, seen as offering superior yields in certain cases to conventional, public markets. A combination of bank regulations, tighter capital requirements on banks, and the potential for superior returns, has helped drive this sector, with interest coming from wealth managers and family offices. OppenheimerFunds and Carlyle recently formed a partnership to tap into this space, for example. At conferences and from commentaries, this publication has been aware of how private credit is expanding rapidly, sometimes driven by family offices, private banks and RIAs. A number of firms have moved into the private credit space recently, such as Firebreak Capital and BroadRiver Asset Management .

“By partnering with a stable of handpicked sub-managers, we are able to diversify across regions, industries, and strategies to include a wide set of private debt opportunities,” says NWM president, David Sung. “Nicola Wealth has always focused on an asset allocation that extends beyond typical stocks and bonds to create true diversification. We see great potential in adding private debt to that mix.”

Established in 1994, Nicola Wealth Management provides portfolio diversification and wealth planning for affluent families, entrepreneurs, and foundations across Canada.