Stratus to provide additional tourism financing
Published:Sunday | November 7, 2021 | 12:05 AMNeville Graham - Business Reporter
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After a year of operation, Stratus Alternative Funds, an investment vehicle created and managed by NCB Capital Markets, is looking to expand its portfolio through the addition of a new layer to its most recent product, which provides financing for...
After a year of operation, Stratus Alternative Funds, an investment vehicle created and managed by NCB Capital Markets, is looking to expand its portfolio through the addition of a new layer to its most recent product, which provides financing for pandemic-hit tourism operations.
With US$60 million in assets under management, NCB Capital CEO Steven Gooden says the funds are deployed in what he calls ‘hubs’ in Jamaica, The Cayman Islands, Trinidad & Tobago, and Barbados.
“These four hubs allow us to tap into the northern, eastern, and southern Caribbean. Through the hubs we are able to broaden our origination opportunities, further diversify the portfolios, and offer our funds to a wide range of investors,” Gooden said in an interview with the Financial Gleaner.
Stratus has four existing funds: infrastructure, Regional Opportunity Fund, Caribbean Mezzanine Fund II, and the Tourism Response Impact Portfolio, or TRIP, which are overseen, Gooden said, by four key persons in place at Stratus to provide management and guidance in deal origination.
The Status fund expansion will be targeted in what will be a second round of financing under TRIP to support the ongoing tourism-recovery effort in the Caribbean, which will call for wider investor involvement, the investment banker said.
“In the second round, we will be going a little broader in terms of participation, and that could very well be via public or private participation,” said Gooden.
As to Stratus’ investment philosophy, it “offers a more flexible type of financing on both sides of the transaction. On the one hand we are offering more flexible solutions for those needing funding while on the other hand, we are providing attractive investment solutions for those with funds looking for opportunities,” he said.
He added that the flexibility not only comes from the rates offered, which are determined by the structure of the financing deal, taking into account the size of the debt, whether there is equity involved and the tenor, but also the type of structure that is aligned with the specific needs of the company seeking capital.
“Let’s say your appetite is either equity, preference shares, or junior debt. Those areas along the capital structure tend to come with a higher cost. Depending on the project or needed cash flows, the customer may be willing to bear that cost,” Gooden said.
Stratus Alternative Funds recently partnered with Stewarts Finance to provide loans to purchasers of motor vehicles sold by the Stewart’s Automotive Group. Stratus took over the role of strategic partner that was left by Stewart’s original partner Simpson Finance, which exited the arrangement, Gooden said.
“Stewarts Finance is in the business of financing, so who better to partner with than an institution such as Stratus Funds that has financing arrangements as a part of its DNA,” he said.