CVC Credit Partners European Opportunities Limited - Q1 2020
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
CVC Credit Partners European Opportunities Limited Q1 2020
CONTENTS
1 CVC Overview 4
• Subchapter
2 CVC European Credit Opportunities Overview 8
• Subchapter
3 Portfolio & Performance Overview 17
• Subchapter
Appendix 23
2
I. CVC Overview
CVC OVERVIEW
CVC
Global Alternatives Asset Manager1
Credit European Private Equity
Established in 2005 Established in 1981
A leading player in global leveraged One of Europe’s largest and most
finance across liquid ($20bn) and illiquid established private equity platform with 24
2
strategies ($5bn)2 $25bn global offices
Over 4,000 monitored and invested credits Over 200 private equity investments
$35bn
$80 billion AUM
Asian Private Equity Strategic Opportunities & Growth
$8bn
Established in 1999 Established in 2014
$12bn
One of the largest and longest-established Strategic Opportunities investing in high-
pan-Asian regional office networks quality, stable businesses with longer
holding periods ($10bn)
Growth equity investing in high-growth
tech-enabled companies ($2bn)
CVC manages funds for over 750 investors from across the world
who place their trust in CVC to grow and protect their capital
1 There can be no assurance any investment objectives will be successful.
2 All amounts as at 30 September 2019. Commitment figure used for Pooled-Closed End Funds and Separately Managed Accounts in ramping phase. Includes warehouse figure for
certain investment vehicles managed by CVC Credit. Underlying figures not in U.S. Dollars are converted using a spot rate as at 30 September 2019. Includes Managed Funds,
4 Separately Managed Account Arrangements and CLOs managed by CVC Credit Partners Investment Management Limited, CVC Credit Partners European Investment Fund
Management Limited, CVC Credit Partners European CLO Management LLP and CVC Credit Partners U.S. CLO Management LLC, on a discretionary and non-discretionary basis.
CVC OVERVIEW
CVC Credit
Diversified Risk / Return Strategies for Our Investors1
Our Mission Statement $3bn
$2bn
Consistently achieve exceptional
$1bn
performance for our investors through a $1bn
$25bn AUM2
collaborative team approach across our
integrated platform and the CVC Network $18bn
Liquid Credit | $20 billion AUM Illiquid Credit | $5 billion AUM
Global Bank Loans Long / Short Credit Multi-Credit Strategy Private Debt Special Situations
Senior secured loans &
bonds Senior secured middle- Stressed and distressed
Event-driven, senior
Blended credit strategies market loans across the credit, invested across a
Structured credit secured focus
U.S. & Europe longer term horizon
CLOs
1 There can be no assurance any investment objectives will be successful.
2 All amounts as at 30 September 2019. Commitment figure used for Pooled-Closed End Funds and Separately Managed Accounts in ramping phase. Includes warehouse figure for
certain investment vehicles managed by CVC Credit. Underlying figures not in U.S. Dollars are converted using a spot rate as at 30 September 2019. Includes Managed Funds,
5 Separately Managed Account Arrangements and CLOs managed by CVC Credit Partners Investment Management Limited, CVC Credit Partners European Investment Fund
Management Limited, CVC Credit Partners European CLO Management LLP and CVC Credit Partners U.S. CLO Management LLC, on a discretionary and non-discretionary basis.CVC OVERVIEW
The CVC Difference
Fully Integrated Platform Across A Global Network of 24 Offices1
300+
750
193 63
CVC Capital CVC Credit
Investment Investment
Professionals2 Professionals3
1 As at 30 September 2019.
2 Number of professionals as at September 2019. CVC Capital has completed over 300 investments since inception.
6 3 Number of professionals as at November 2019.II. CVC European Credit Opportunities Overview
CVC EUROPEAN CREDIT OPPORTUNITIES OVERVIEW
Fund Overview
CVC Credit Investment in European Senior Secured Loans and other sub-investment grade corporate credit
Partners
◼ Largest LSE-listed closed ended investment company focused on this strategy
European
Opportunities – €509m market capitalisation2
Limited1 – Main market listing (admission date: 25 June 2013)
– GBP, EUR and USD share classes (Tickers: CCPG LN and CCPE LN) 3
◼ The Company invests in CVC Credit’s European Credit Opportunities investment vehicle (“CEC” or “Investment
Vehicle” 4) which has been investing since April 2009 and has generated an annualised gross return of 10.8% ITD
(9.4% net ITD) 5
What is Different? Daily secondary market share trading and quarterly NAV based liquidity6
◼ Company share purchases on a NAV basis via contractual quarterly tenders6
◼ Direct connection to the liquidity of the underlying loans and bonds
◼ Timing mirrors Investment Vehicle redemptions7,8
◼ Paid for with back-to-back redemptions of the underlying Investment Vehicle
◼ Up to 24.99% of the outstanding shares per quarter subject to a cap of 50% p.a.
(1) CVC Credit Partners European Opportunities Limited is also referred to as the “Company” in this document.
(2) Source: Bloomberg. As at 31 December 2019. Market capitalisation of GBP share class converted to EUR at a flat rate as at 31 December 2019.
(3) There are presently no USD shares in issue.
(4) CVC European Credit Opportunities S.àr.l. Compartment A , the investment vehicle, was established in September 2011, and between April 2009 and September 2011 the portfolio was held
by CRPII.
(5) Source: CVC Credit Partners. As at 31 December 2019. CEC began with significant investment by employees of CVC and initially charged its investors only a management fee, but during the
second half of 2011 adopted terms that better represent the market, including an incentive allocation borne by its investors.
(6) The Company conducts tender activities on a quarterly basis, subject to pre-determined rules (including but not limited to a successful redemption of a pro rata amount of the Investment
Vehicle investment) and an annual shareholder vote to re-approve arrangements. Subject to payment of tender fees.
8 (7) 50 days notice (45 days at the Investment Vehicle level and 5 days for the Company to aggregate and deliver redemption notices).
(8) There will be an additional settlement period from quarter end for the shares to settle.CVC EUROPEAN CREDIT OPPORTUNITIES OVERVIEW
Fund Snapshot – Key Attributes
Active Management, Attractive Stable & Secured Yield, Opportunistic Upside with Downside Protection
8-10% 5.7% 87% 76%
Floating Rate2 Senior Secured2
Total Target Gross Return1 Current Yield2
61%
9.4% €984m €150m+ Performing Credit
Net Return p.a.
Since Inception3
Dedicated Strategy AUM4 of CVC Partner Capital Invested 39%
Credit Opportunities5
Quarterly NAV based liquidity
For illustrative and discussion purposes only and subject to change.
(1) Target returns are hypothetical in nature and are shown for illustrative and informational purposes only. This summary is not intended to forecast or predict future events, but rather to indicate
the returns for the asset classes indicated herein that CVC Credit has observed in the market generally over the course of an investment cycle.
(2) As at 31 December 2019.
(3) Source: CVC Credit Partners. As at 31 December 2019. CEC began with significant investment by employees of CVC and initially charged its investors only a management fee, but during the
second half of 2011 adopted terms that better represent the market, including an incentive allocation borne by its investors.
(4) As at 31 December 2019.
9 (5) As at 31 December 2019. Current portfolio strategy attribution is not indicative of future attribution. Please see Appendix for important disclosures regarding the limitations of target returns and
related performance.CVC EUROPEAN CREDIT OPPORTUNITIES OVERVIEW
Performance Overview
▪ Identified long term market opportunity in credit driven by structural change
▪ European bias strategy with a core focus on floating rate senior secured assets across diversified large liquid capital structures
▪ Dynamic strategy allocating across Performing Credit and Credit Opportunities predominantly to European loans, with proven
active and flexible risk management across the credit spectrum within differing market environments
▪ Performing Credit: European banks historic dominance of debt finance shifting to institutional market
▪ Credit Opportunities: Accelerated asset disposals across multiple industries and geographies
▪ Strong alignment with CVC with over €150 million of CVC partner capital invested in the strategy1
CVC European Credit Opportunities Vehicle Cumulative Net Returns2 Annualised Return Since Inception
325
9.4% Net Return CEC Net Returns4
300
since inception 9.4%
275
250 S&P ELLI (excl. FX)3
7.8%
225
200 CS European LLI (Hedged to €)3
7.6%
175
150 HFRX Global3
1.5%
125
100
Mar-09 Oct-09 May-10 Dec-10 Jul-11 Feb-12 Sep-12 Apr-13 Nov-13 Jun-14 Jan-15 Aug-15 Mar-16 Oct-16 May-17 Dec-17 Jul-18 Feb-19 Sep-19
CEC A (Net) CS WELLI (Hedged to €) S&P ELLI (excl. FX) HFRX
Apr-09 –
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Dec-09
Net
29.2% 19.1% 4.5% 14.0% 7.6% 3.1% 5.1% 9.5% 9.2% 0.3% 2.0%
Returns2
(1) As at 31 December 2019.
(2) Data is as at 31 December 2019. Returns to September 2014 generated without leverage. Returns post-September 2014 generated with approximately 15% of AUM provided by a debt facility.
Includes audited and unaudited results, and also includes estimates by CVC Credit Partners. CVC Credit Partners makes no representations or guarantees regarding the accuracy or
completeness of such investment performance information. Past performance is not an accurate indicator of current or future returns and potential investors should have no
expectation that past performance can or will be replicated in the future.
(3) The S&P ELLI (excluding FX), HFRX Global Index and Credit Suisse European Leveraged Loan Index (Hedged to €) are widely recognised, unmanaged indices of market activity and have
been included as a general indicator of market performance. There are significant differences between the types of investments made or expected to be made by the Vehicle and the
10 investments covered by such index.
(4) CEC began with significant investment by employees of CVC and initially operated with a reduced economic structure. Returns as at 31 December 2019.CVC EUROPEAN CREDIT OPPORTUNITIES OVERVIEW
Investment Strategy
Proven & Flexible Strategy Across the Credit Spectrum
Performing Credit Credit Opportunities
◼ Stable Income Generation ◼ Capital Gains and Income Generation
– 8% annualised gross return (ITD)1 – 16% annualised gross return (ITD)1
◼ Senior Secured ◼ Senior Secured & Subordinated
◼ Floating Rate ◼ Floating and Fixed Rate
◼ Large Cap Liquid Issuers ◼ Event-Driven Opportunistic
◼ Sourced in Primary & Secondary ◼ Sourced Directly by CVC Credit
4 – 7% Target Gross Return2 7 – 20%+ Target Gross Return2
Past performance is provided for illustrative purposes only and not indicative of future results, which may vary. There can be no assurance that the Vehicles will achieve comparable results or be able to
avoid losses, including loss of all capital.
(1) As at 31 December 2019. The annualised returns presented herein are on a “gross” basis and accordingly do not reflect the management fees, performance fees, taxes and expenses that are borne by investors
in CVC Credit Partners European Opportunities Limited. The annualised returns presented herein have been calculated: (i) to assist prospective investors with their review of the performance data contained
herein; (ii) on a reasonable efforts basis by CVC Credit Partners and, so far as possible, reconciled against the audited attribution files for CVC Credit Partners European Opportunities Limited, in each case
maintained by the CVC Credit Partners’ operations team. CVC Credit Partners European Opportunities Limited notes that such annualised returns presented were therefore not necessarily experienced by an
actual investor in the relevant CVC Credit Partners European Opportunities Limited and may be inconsistent with the audited performance data for such CVC Credit Partners European Opportunities Limited
11 which may have been prepared on a different basis.
(2) Target returns are hypothetical in nature and are shown for illustrative and informational purposes only. This summary is not intended to forecast or predict future events, but rather to indicate the returns for the
asset classes indicated herein that CVC Credit has observed in the market generally over the course of an investment cycle.CVC EUROPEAN CREDIT OPPORTUNITIES OVERVIEW
Performance vs. Listed Market Peers
NAV Performance1 Share / Exchange Price Performance1
40.0% CVC Credit Partners European Opportunities (GBP) 35.0% CVC Credit Partners European Opportunities (GBP)
36.6%
CVC Credit Partners European Opportunities (EUR) CVC Credit Partners European Opportunities (EUR)
35.0% Alcentra European Floating Rate Income Fund (GBP) 29.6% Alcentra European Floating Rate Income Fund (GBP)
30.0%
NB Global Floating Rate Income Fund (GBP) NB Global Floating Rate Income Fund (GBP)
30.7% 27.3%
30.0% 28.1%
25.0%
25.0% 20.3%
22.5%
20.0%
20.0%
14.8%
15.0%
12.5%
15.0% 11.3%
10.0% 10.5%
9.8% 9.7% 9.8% 9.3%
10.0% 8.1% 8.2%
10.0% 8.8% 8.5%
4.6%
4.7% 4.8% 5.1% 5.0% 3.9% 3.9%
5.0% 2.9% 2.2%
1.4% 2.7% 2.2%
2.3% -3.5% 1.3%
1.0% 0.5%
0.1% -5.0%
0.0% 0.0%
-1.3%
-2.5%
-5.0% -5.0%
2014 - 2020 2019 2018 2017 2016 2014 - 2020 2019 2018 2017 2016
YTD YTD
For illustrative purposes only.
(1) Source: Morningstar and Winterflood (as at 7 January 2019).
12CVC EUROPEAN CREDIT OPPORTUNITIES OVERVIEW
Outperformance Across both Up & Down Markets1
CVC European Credit Opportunities Up-Market Performance1
2.00% 2.00% 2.00% 2.00%
1.69%
1.50% 1.35% 1.50% 1.50% 1.32% 1.50% 1.31%
1.23%
1.01% 0.92%
1.00% 1.00% 1.00% 1.00% 0.83%
0.50% 0.50% 0.50% 0.50%
0.00% 0.00% 0.00% 0.00%
CVC European CS WELLI CVC European S&P ELLI (excl. CVC European CS WEHY CVC European HFRX
Credit (Hedged) Credit FX) Credit Credit
Opportunities Opportunities Opportunities Opportunities
CVC European Credit Opportunities Down-Market Performance1
0.00% 0.00% 0.00% 0.50%
0.08%
0.00%
-0.50%
-0.44%
-0.50% -0.50% -0.50%
-1.00%
-1.00%
-0.70% -0.70%
-0.75% -1.06%
-0.79%
-1.33%
-1.00% -1.00% -1.50% -1.50%
CVC European CS WELLI CVC European S&P ELLI (excl. CVC European CS WEHY CVC European HFRX
Credit (Hedged) Credit FX) Credit Credit
Opportunities Opportunities Opportunities Opportunities
Past performance is provided for illustrative purposes only and not indicative of future results, which may vary. There can be no assurance that comparable results or ability to avoid
losses, including loss of all capital, will be achieved.
(1) Relative to benchmark performance shown. The Up/Down Capture analyses is representative of performance April 2009 to 31 December 2019. Up-market performance is defined as a month in
13 which the return of the relevant index was positive, and down-market performance is defined as a month in which the return of the relevant index was negative. Note: Please see Section
“Glossary, Disclaimers & Additional Footnotes” for relevant footnotes.CVC EUROPEAN CREDIT OPPORTUNITIES OVERVIEW
Experienced & Diversified Team1
Andrew Davies Mark DeNatale
Partner Partner
Portfolio Head of Europe Global Head of Special Situations
Managers Senior Portfolio Manager Senior Portfolio Manager
18 years experience 26 years experience
Europe U.S.
Cary
Neale Ran Guillaume Sue Pieter Stuart Gretchen Tom Oscar Caroline David Kevin Scott
Ho
Broadhead Landmann Tarneaud Player Staelens Levett Bergstresser Newberry Anderson Benton DeSantis O’Meara Bynum
Snr. MD / Head
Snr. Managing Snr. Managing Snr. Managing Managing Managing MD / Trader Partner, Partner, Snr. Managing Snr. Managing Snr. Managing Snr. Managing Snr. Managing
of CLO
Director Director / PM Director / PM Director/Asst. PM Director / PM Snr. PM Snr. PM Director / PM Director / PM Director / PM Director / PM Director / PM
Origination
33 Years 21 Years 16 Years 35 Years 18 Years 24 Years 32 Years 35 Years 28 Years 22 Years 21 Years 18 Years 15 Years
23 Years
Chris Josefa Natalia Simone Jonathan David Justin Eric LynnAnn
Andrew Tully Hamza Miklavz Brian Andrew
Fowler Llinares Nowak Zacchi Stanley Rous Sughrue Ballantine Loufik
Managing Filali Bevc Miller Eversfield
Managing Managing Managing Managing Managing Managing Managing Director Director /
Director Director Director Director Director
Director Director Director Director Director / PM Director Director/Asst. PM Asst. PM
23 Year 17 Years 15 Years 14 Years 16 Years
20 Years 21 Years 18 Years 14 Years 23 Years 21 Years 17 Years 22 Years 14 Years
CVC Credit Mitchell Othman Edward
Alvaro Ruiz Dominic David Francie Andrew
Catalin
Molly Lowell Arlene Erica Spenser
Nolasco Connelly Deregowski Ward Milano Whiteman Thomas Kenny Davis Samms
Partners Glynn Alaoui Michel
Investment Investment Investment Director Director
Cibu
Director / Investment Investment Investment Investment
Investment Director Director Director
Director Director Director
Director
Trader Director Director Director Director
12 Years 11 Years 9 Years 12 Years
Team 11 Years 9 Years 10 Years 11 Years 11 Years 11 Years 15 Years 14 Years 12 Years 10 Years
Chloe Alex Moris Kevin Alessio Di Irene Costa Brendan Irina Joseph
David Wang Sara Garre Michael Mattei Max Liu
Qiao Roy Nachmias Wong Vito Huete Trikas Lynch Romanova Azevedo
Investment Investment Investment Investment
Investment Investment Investment Investment Investment Investment Investment Investment Analyst Investment
Director, Trader Director Analyst Executive
Director Director Director Director Director Executive Executive Executive Executive
10 Year 9 Year 3 Year 4 Years
8 Years 7 Years 7 Years 7 Years 6 Years 5 Years 5 Years 3 Year 7 Years 5 Years
Renu Julian Susana
Tom Hayhurst Andrew Amanda
Shiva Lilienthal Carlini
Associate Soulas Steffey
Investment Investment Investment
Junior Trader Junior Trader
Executive Executive Analyst
8 Years 4 Years 1 Year
4 Years 4 Years 4 Years
15+ 25 36 14
Languages Spoken Across the Years of Average Investment Dedicated Operations & Finance Dedicated Legal & Compliance
Investment Professionals Experience2 Professionals Professionals
For informational purposes only.
(1) Years of professional experience as at January 2020.
(2) Managing Director and above.
14CVC EUROPEAN CREDIT OPPORTUNITIES OVERVIEW
Key Terms
Company ◼ Limited liability company incorporated in Jersey
Listing ◼ London Stock Exchange Main Market – Premium Listing on the Official List on 26 June 2013
Shares in Issue ◼ 131m EUR shares and 324m GBP shares1
Market Capitalisation ◼ €127.0m (Euro Class) / £343.6m (Sterling Class) 1
Investment Vehicle ◼ Compartment A of CVC European Credit Opportunities S.àr.l. domiciled in Luxembourg
Investment Vehicle
◼ CVC Credit Partners Investment Management Limited
Manager
Target Return ◼ 8 – 12% p.a. over the medium term (net of fees and expenses) 2
Target Dividend ◼ 5.5% p.a. paid quarterly (from February each quarter) 2
◼ Senior Secured Obligations >= 50%
◼ Structured credit = 60%
◼ CVC Capital Portfolio Company Debt ObligationsIII. Portfolio & Performance Overview
PORTFOLIO & PERFORMANCE OVERVIEW
Portfolio Snapshot (December 2019)
Portfolio Overview1 Asset Class Exposure1
# of Positions 131 Loans (1st Lien)
4%
# of Corporate Credits 12%
83 Senior Secured Bonds
4%
Weighted Average EBITDA >€400m Loans (2nd Lien)
4%
Structured
Current Yield 5.7%
13% 63% Cash
Weighted Average Portfolio Market Price2 94.7
Other
Weighted Average Debt / EBITDA3 5.0x
% Floating Rate Assets 86.7%
Industry Exposure1 Geography Exposure1
Healthcare & Pharmaceuticals
Retail Store UK
13% Diversified/Conglomerate Service 9%
Germany
Chemicals, Plastics & Rubber 9% 24%
31%
10% France
Broadcasting & Entertainment
Electronics 11% Netherlands
10% Insurance
U.S.
3% 14%
Healthcare, Education & Childcare
4% 7% 14% Spain
5% Hotel, Gaming & Leisure
5% 6% 6% 14%
Business Services Other
Other
(1) Source: CVC Credit Partners. As at 31 December 2019. Past performance is not an accurate indicator of current or future returns and investors should have no expectation that past performance
can or will be replicated in the future.
(2) Average market price of the portfolio weighted against the size of each position.
(3) As at 30 September 2019. The weighted average debt (through the debt tranche CVC Credit Partners holds in the capital structure) / EBITDA for each position in the portfolio.
17PORTFOLIO & PERFORMANCE OVERVIEW
Monthly Performance Data1
Monthly Fund Net Returns
Benchmark3
Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Net Return2 CS WELLI S&P ELLI
2019 0.6% 0.9% 0.1% 1.0% (0.9%) 0.2% (0.3%) (0.6%) 0.4% (0.8%) 0.5% 1.5% 2.0% 5.0% 4.5%
2018 0.8% 0.5% 0.2% 0.6% 0.2% 0.6% 1.0% 0.6% 0.17% (0.9%) (1.8%) (1.5%) 0.3% 0.5% 1.4%
2017 2.2% 0.8% 0.6% 0.9% 1.2% 0.8% 1.1% 0.3% 0.3% 0.4% 0.4% 0.0% 9.2% 3.3% 4.1%
2016 (0.5%) (1.6%) 2.2% 1.6% 1.0% (0.8%) 2.0% 0.9% 0.6% 0.9% 1.5% 1.3% 9.5% 6.5% 5.7%
2015 0.9% 1.2% 1.2% 1.2% 0.8% (0.3%) 0.8% (0.1%) 0.1% 0.2% (0.3%) (0.4%) 5.1% 3.1% 4.5%
2014 0.7% 0.4% 0.3% 0.4% 0.5% 0.7% 0.2% 0.2% (0.2%) (0.3%) (0.1%) 0.2% 3.1% 2.0% 3.0%
2013 1.1% 0.7% 0.8% 1.4% 0.7% (0.8%) 0.3% 0.5% 0.7% 0.7% 0.7% 0.4% 7.6% 8.7% 9.1%
2012 3.7% 1.4% 1.0% 0.5% (1.1%) 0.6% 1.2% 1.5% 1.1% 0.8% 1.5% 1.1% 14.0% 10.4% 9.5%
2011 4.0% 1.8% (0.4%) 1.3% 2.6% (1.0%) (0.3%) (2.9%) (1.6%) 2.2% (2.1%) 1.2% 4.5% -0.6% 0.4%
2010 7.9% (1.2%) 3.1% 3.3% (2.5%) (1.6%) 1.3% 1.9% 1.8% 1.8% 0.6% 1.5% 19.1% 8.5% 8.4%
2009 (0.3%) 0.3% 3.5% 6.7% 5.1% 2.7% 3.2% 1.7% 3.1% 29.2% 42.7% 36.7%
(1) Source: CVC Credit Partners. As at 31 December 2019. Note: All statistics are unaudited and subject to revision. The information set forth above was compiled from sources CVC Credit Partners believes to be reliable; however CVC
Credit Partners makes no representations or guarantees hereby with respect to the accuracy or completeness of such data. Please read the Disclaimer. Past performance is not an accurate indicator of current or future returns
and potential investors should have no expectation that past performance can or will be replicated in the future.
(2) CEC began with significant investment by employees of CVC and initially charged its investors only a management fee, but during the second half of 2011 adopted terms that better represent the market, including an incentive
allocation borne by its investors.
18 (3) The S&P ELLI (excluding FX) and Credit Suisse European Leveraged Loan Index (Hedged to €) are widely recognised, unmanaged indices of market activity and have been included as a general indicator of market performance.
There are significant differences between the types of investments made or expected to be made by the Vehicle and the investments covered by such index. Note: Please see Section “Glossary, Disclaimers & Additional Footnotes”
for relevant footnotes.PORTFOLIO & PERFORMANCE OVERVIEW
Tactical Investing Across Strategies1,2
Annualised Allocation by Strategy (ITD) Annualised Return by Strategy (ITD)3 Annualised Net Return Attribution (ITD)
100% 20% 18%
9.4%
Annualised net
15%
80% 39% 16% return since
inception
12%
60% 12%
3.3%
9%
40% 8% 16%
49%
6%
8.0%
20% 4% 8%
3%
12%
0% 0% 0% -0.5%
Performing Credit Credit Opportunities Cash/Expenses 4,5
For illustrative purposes only. -3%
Note: Please see Section “Glossary, Disclaimers & Additional Footnotes” at the end of this presentation for relevant footnotes.
19PORTFOLIO & PERFORMANCE OVERVIEW
Tactical Investing Across Strategies (Cont’d)
Historic Net Return Attribution1,2
35%
29.2%
30%
25%
19.1%
20% 14.0%
15% 29.5%
9.5% 9.2% 9.4%
16.2% 7.6%
15.4%
10%
5.1% 7.7%
4.5% 5.6% 3.1% 8.9% 8.0%
5% 3.7% 0.3% 2.0%
3.7% 1.9%
4.2% 0.8%
3.7% 3.2% 3.8% 3.0% 2.5% 3.3% 3.3%
0.4% 1.8% 2.7% 1.0%
0% (0.3%) (0.3%) (0.4%) (0.6%) (1.8%) (0.4%) (0.4%)
(0.4%)
(0.5%)
(0.6%) (1.2%) (0.4%) (0.6%) (0.0%) (1.4%)
(0.4%) (0.5%) (3.9%) (1.1%) (0.4%)
(2.0%) (1.8%) (0.9%) (0.9%)
(5%)
2009 (Apr- 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 ITD
Dec) Annualised
Performing Credit Credit Opportunities Cash/Expenses Fees
2009 (Apr – Dec) 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 ITD Annualised
Allocation Attribution Return Allocation Attribution Return Allocation Attribution Return Allocation Attribution Return Allocation Attribution Return Allocation Attribution Return Allocation Attribution Return Allocation Attribution Return Allocation Attribution Return Allocation Attribution Return Allocation Attribution Return Allocation Attribution Return
Performing 1% 0.4% 32% 18% 3.6% 20% 29% 1.8% 6% 30% 3.2% 11% 56% 3.8% 7% 57% 2.7% 5% 44% 3.0% 7% 44% 4.2% 9% 47% 2.5% 5% 45% 1.0% 2% 51% 3.3% 7% 39% 3.3% 8%
Credit Ops 68% 29.5% 43% 69% 16.2% 24% 48% 3.7% 8% 61% 15.4% 25% 33% 5.7% 17% 38% 1.9% 5% 46% 3.7% 8% 47% 7.7% 16% 44% 8.9% 20% 45% 0.8% 2% 41% 0.0% 0% 49% 8.0% 16%
Cash/Expenses
(3)(4) 31% -0.3% 13% -0.3% 23% -0.4% 9% -0.6% 11% -0.1% 5% -0.4% 10% -0.4% 9% -0.4% 9% -0.4% 10% -0.6% 8% -0.4% 12% -0.5%
Total Gross
100% 29.6% 100% 19.5% 100% 5.1% 100% 18.0% 100% 9.4% 100% 4.2% 100% 6.3% 100% 11.5% 100% 11.0% 100% 1.3% 100% 2.9% 100% 10.8%
Return
Fees -0.4% -0.5% -0.6% -3.9% -1.8% -1.1% -1.2% -2.0% -1.8% -0.9% -0.9% -1.4%
Total Net
100% 29.2% 100% 19.1% 100% 4.5% 100% 14.0% 100% 7.6% 100% 3.1% 100% 5.1% 100% 9.5% 100% 9.2% 100% 0.3% 100% 2.0% 100% 9.4%
Return
For illustrative purposes only.
Note: Please see Section “Glossary, Disclaimers & Additional Footnotes” for relevant footnotes.
20PORTFOLIO & PERFORMANCE OVERVIEW
Dynamic Allocation Across Strategies
IPO of CVC Credit Partners
CRP II / CEC Roll European Opportunities Ltd.
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
30-Apr-09 30-Nov-09 30-Jun-10 31-Jan-11 31-Aug-11 31-Mar-12 31-Oct-12 31-May-13 31-Dec-13 31-Jul-14 28-Feb-15 30-Sep-15 30-Apr-16 30-Nov-16 30-Jun-17 31-Jan-18 31-Aug-18 31-Mar-19 31-Oct-19
Performing Credit Credit Opportunities Cash
For illustrative purposes only.
Source: CVC Credit Partners. As at 31 December 2019. CVC Credit Partners adopted the categorisation of investment strategies described above in September 2011 and accordingly the attribution of
investment returns as between strategies above in respect of the periods prior to such date has been made retrospectively by CVC Credit Partners for the purposes of this Presentation and the
Prospectus. The attribution of investment returns as between these strategies is necessarily subjective to a certain degree. CVC Credit Partners considers that the attribution shown above represents a
21 fair and reasonable allocation of investment returns between the respective strategies. Cash includes the liquidity facility instalments effective from 15 October 2014. The Credit Opportunities target
return represents the combination of the Credit Opportunities strategy with a 7 - 15% return profile and the Special Situations strategy with a 15 - 40% return profile.PORTFOLIO & PERFORMANCE OVERVIEW
Dynamic Portfolio Investing Across the Capital Structure
IPO of CVC Credit Partners
CRP II / CEC Roll European Opportunities Ltd.
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
30-Apr-09 30-Nov-09 30-Jun-10 31-Jan-11 31-Aug-11 31-Mar-12 31-Oct-12 31-May-13 31-Dec-13 31-Jul-14 28-Feb-15 30-Sep-15 30-Apr-16 30-Nov-16 30-Jun-17 31-Jan-18 31-Aug-18 31-Mar-19 31-Oct-19
Senior Secured Loan Senior Secured Bond 2nd Lien CLO Mezzanine & Other Subordinated Debt Cash
For illustrative purposes only.
Source: CVC Credit Partners. As at 31 December 2019. Cash includes the liquidity facility instalments effective from 15 October 2014.
22Appendix
Appendix A Market Overview
APPENDIX A – MARKET OVERVIEW
European Bank Non-Core Asset Sales Continue to Present Opportunities
Recent acceleration of bank divestments account for only a relatively small portion of the estimated non-
core legacy assets that still remain on balance sheet:
▪ €2.1 trillion of European non-core loans and €1.1 trillion face value of European non-performing loans (“NPLs”)(1)
Banks need to boost their returns with few reaching ‘breakeven’, requiring them to sell non-core loans and
refocus resources on viable business lines
▪ ECB continues to put pressure on banks to advance resolution of bad-debt issues
Volume of European Secondary Loans Sold(1) NPLs by Country(2)
€bn
2016 (€bn) CVC Capital Office
160
Italy 202 ✓
140
Germany 135 ✓
120
France 116 ✓
100 Spain 120 ✓
80 Greece 105
140
60 118 Russia 80
40
94 100
United Kingdom 60 ✓
64 Ireland 59
20 46
36
12
Netherlands 42 ✓
0
2010 2011 2012 2013 2014 2015 2016 2017 Other 165
Total €1.1tn
For informational purposes only.
(1) Source: PwC Bank Restructuring Conference 2018.
25 (2) Source: PwC European Portfolio Advisory Group Market Update (May 2017).APPENDIX A – MARKET OVERVIEW
Market Technicals
Global Leveraged Loan Markets Have Reached Record Levels ($bn)(1) CLOs Continue to Dominate Global Leveraged Loan Markets(2)
$1,357
$1,400 U.S. Europe Finance Co. Insurance Co. Hedge, Distressed & High-Yield Funds Loan Mutual Funds CLO
$207
100%
$1,200 $1,126
90%
$986 $1,008
$952 $167 80% 41%
$1,000 50%
43%
$826 $105 $121 55% 53%
$119 70% 62% 61% 62% 64%
$731 68%
$800 $677 $694 60%
$663 $144
$600 $200 $142 50% 14% 19%
$173 $146 $1,150 9%
$959 40% 15%
$832 $881 $887
$400 30% 31%
$683 33% 22% 21% 24%
32% 30% 23%
$531 $552 21%
$504 $516 20% 23%
$200
10% 9% 10% 11% 7% 6% 3%
6% 5% 6% 5%
4% 5% 5% 6% 6% 6%
$0 3% 5% 5% 2% 1% 1% 1% 1% 1% 1%
0%
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Evolution of the Global Leveraged Loan & HY Market ($bn)(3) U.S. Mutual Fund & ETF Ownership of Corporate Debt on the Rise(4)
4,000
$3.5 tr 30%
3,500 $3.2 tr $3.3 tr $3.3 tr
Ownership of U.S. Corporate Debt
$3.0 tr 25%
3,000 $2.7 tr
2,500 $2.3 tr 20%
$2.1 tr $2.1 tr $2.2 tr $2.1 tr $2.1 tr
2,000 $1.8 tr 15%
1,500
10%
1,000
$10bn of ETF inflows vs. $101bn of outflows
500 5%
from actively managed funds since 2014(5)
0 0%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
U.S. Institutional Loans European Institutional Loans U.S. High Yield European High Yield Mutual Funds & ETFs
For informational purposes only.
(1) Source: S&P Global Market Intelligence - Global Leveraged Lending Report (2018 4Q).
(2) Source: S&P Global Market Intelligence - Quarterly Leveraged Lending Review (2018 4Q).
(3) Source: Credit Suisse, Leveraged Finance Strategy Monthly, as of January 8, 2019. European Institutional Loans and High Yield converted as at 31 December 2018 FX rate.
26 (4) Source: Federal Reserve. From Jan. 2005 to Dec. 2017.
(5) Source: J.P. Morgan as at 30 November 2018. Reflects flows from 2014 to November 2018.APPENDIX A – MARKET OVERVIEW
Market Fundamentals
Net Primary Dealer Inventories in Corporate Debt (USD billions)(1)
$120
$105
$90
$75
$60
$45
$30
$15
$-
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
U.S. and European Average LBO Equity Contribution(2) U.S. and European Total Debt / EBITDA Multiples(2)
48% 49% 48% 5.9x U.S. Europe
US Europe 47%
46% 45%
44% 44%
42% 42% 42%
41% 41% 40%42% 41% 41%
39% 5.4x 5.4x
38% 38% 37%
36% 5.2x
5.1x 5.1x
33% 33% 5.0x 5.0x 4.9x 5.0x
31% 31% 4.9x 4.9x 4.9x
4.7x 4.7x 4.7x
4.6x
4.4x 4.4x 4.4x 4.5x
4.2x
4.1x 4.1x
3.9x
3.7x
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
For informational purposes only.
(1) Source: The Federal Reserve Bank of New York. Includes commercial paper, investment grade and non-investment grade bonds, notes and debentures. As at 26 December 2018.
27 (2) Source: S&P LCD. Global Leveraged Lending Review (Q4 2018).APPENDIX A – MARKET OVERVIEW
European Leveraged Loan Market – Relative Value
Weighted Average New-Issue Spreads Europe vs. U.S.(1) European Secondary Market Spreads Bonds vs. Loans(2)
(bps p.a.) (bps p.a.)
600 2,000
1,750
500
1,500
400 1,250
1,000
300
750
200 500
250
100
0
0 -250
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
2Q01
2Q02
2Q03
2Q04
2Q05
2Q06
2Q07
2Q08
2Q09
2Q10
2Q11
2Q12
2Q13
2Q14
2Q15
2Q16
2Q17
2Q18
2Q19
Difference European Loans European High Yield
Europe U.S.
For informational purposes only.
(1) Source: S&P LCD – Global Leveraged Lending Report Q2 2019.
28 (2) Source: Loan Spreads: S&P LCD – ELLI Spread to Maturity, HY Bond Spreads: Bloomberg (CS Western European High Yield Index, STW). As at 2 August 2019.Appendix B Additional CVC Credit Information
APPENDIX B – ADDITIONAL CVC CREDIT INFORMATION
Utilising the CVC Network through Due Diligence
Proprietary Credit Database Risk-Mitigation
✓ c.4,000 credits monitored since new issue ✓ Deep understanding of distinct business
✓ Every stressed and distressed credit environments that exist in local markets
began its life as a new issue ✓ 300+ equity investments
Differentiated
Deep Relationship Network Established
13+ Years of Credit Investing
✓ Dedicated sourcing and trading
+ Established Network of Investment
Professionals
✓ Long tenure at CVC and deep roots in
Access &
Analysis
professionals their local markets
Underwriting Expertise “Partner of Choice”
✓ Conservative credit culture ✓ Strong relationships with major banks
✓ Dedicated sector investment analysts ✓ $34 billion of financing activity in 2018(2)
Superior access to information drives better informed credit decisions
For informational purposes only.
(1) All interaction and collaboration with CVC Capital Partners is subject to the Firm’s Information Barrier Policies & Procedures and Compliance approval. There is no guarantee that the team
will be able to leverage CVC Capital Partners expertise and network on any future investment opportunity.
30 (2) As at December 2018. For CVC Capital Partners Europe/U.S., CVC Strategic Opportunities, CVC Growth Partners.APPENDIX B – ADDITIONAL CVC CREDIT INFORMATION
Proprietary Technology Solutions
Knowledge Derived from Continually Monitoring Over 4,000 Credits
CreditWatch – Driving Synergy Risk Management Dashboards
◼ Proprietary Research & Trading System
◼ Updated on a daily-basis; data extracted from proprietary database and
◼ Structured platform integrates vast information archive WSOWeb
◼ Allows Portfolio Managers and credit professionals to: ◼ Tracks positions and recommendations across every portfolio in the platform
– Monitor industry trends ◼ Tracks trade history
– Receive analyst commentary ◼ Tracks asset exposure across portfolios, strategies and region
– Evaluate current holdings ◼ Monitors watchlist items across all portfolios
– Analyse comparable companies
31 Note: CVC Credit may at any time enhance or supplement the ongoing portfolio management activities described herein as deemed appropriate by CVC Credit.Appendix C Access & Terms
APPENDIX C – ACCESS & TERMS
Access & Terms
CVC European Credit
CVC Credit Partners European Opportunities Ltd
Opportunities S.àr.l.
Exposure Actively managed debt portfolio of mainly European leveraged loans and high yield bonds
Management Fees 1.0% p.a.
Performance Fees 15% of the increase in NAV in excess of 5% p.a. subject to a high watermark
Notes (Preferred Equity Certificates)
Format Issued By Luxembourg Securitisation LSE Listed Jersey Company Shares
Vehicle
Up to 1.0% for 24 months, subject to
Redemption Fees N/A
the Manager’s discretion
Daily Price
Transparency ✓ Daily price transparency and on-exchange trading
Daily Secondary
Market Liquidity ✓ Secondary market liquidity for small size (1)
Direct NAV Based
Liquidity ✓ ✓ Quarterly NAV based liquidity with 90 days notice (2)
NAV based liquidity restrictions:
■ Gates at the Investment Vehicle Level(3)
Direct NAV Based ■ Aggregate cap of 50% p.a.(4) purchased through NAV based
Liquidity ✓ ✓ liquidity mechanism and any Company share buy backs
Restrictions ■ Annual shareholder vote to approve direct liquidity arrangements
■ Minimum holding period of 6 months prior to utilisation of direct
NAV-based liquidity mechanism(5)
For informational purposes only.
(1) There can be no guarantee that the ability of the market makers to redeem the shares on an NAV basis will translate into improved secondary market liquidity in the shares or that a liquid secondary market for the shares will
develop.
(2) Quarterly NAV based sales (subject to certain restrictions) with 90 days notice is the same time line as redemptions for the Investment Vehicle and is consistent with the typical redemption arrangement for credit hedge funds.
(3) Manager will have the right to gate or suspend redemptions if it determines in its sole discretion that market liquidity is such that the remaining investors will be prejudiced by any realisations of underlying assets.
33 (4) Calculated on the amount of shares in issue as at the beginning of each calendar year.
(5) See Tender Circular document dated 27 February 2017, available at: www.ccpeol.com.APPENDIX C – ACCESS & TERMS
Investment Vehicle & Company Structure
CVC European Credit
Opportunities S.àr.l CVC Credit
Partners European
Investment
Opportunities Ltd
(“Investment Vehicle
Subscription Ordinary Shares
Vehicle”)(1)
(“Company”) Investors
Luxembourg Company
Jersey Closed Ended
Investment Vehicle Investment Company
Manager: CVC Credit
Partners Investment
Management Ltd
For illustrative purposed only.
(1) The Investment Vehicle is a S.àr.l. investment vehicle domiciled in Luxembourg which will issue preferred equity certificates.
34Appendix D Principal Risk Factors
APPENDIX D – PRINCIPAL RISK FACTORS
Principal Risk Factors
An investment in the Company will carry a number of risks, including the risk that the entire investment may be lost. Set out below is a non-exhaustive list of the material risks that should be considered by
recipients of this presentation.
The list below does not constitute a comprehensive description of all the material risks applicable to the Company or its shares, and the recipient should consider taking independent advice prior to any
investment decision. The recipient should also check with his advisors the regulatory, legal, accounting, and tax treatment of any potential investment in the Company before making any investment
decision.
1. Risks relating to the Company
▪ The ability of the Company to meet its investment objective will depend on the Investment Vehicle Manager’s ability to successfully manage the Investment Vehicle in accordance with its
investment objective and investment policy
▪ The Company has no control over the Investments made by the Investment Vehicle
▪ The Company’s target return and target dividend yield are based on estimates and assumptions that are inherently subject to significant business and economic uncertainties and
contingencies, and the actual return and dividend yield may be materially lower than the targeted return and target dividend yield
▪ No reliance should be placed by investors on the past performance of the Company.
▪ Global capital markets have been experiencing volatility, disruption and instability. Material changes affecting global debt and equity capital markets may have a negative effect on the
Company’s business, financial condition, results of operations, NAV and/or the market price of the Shares
▪ The Company Net Asset Value is calculated based on the Investment Vehicle NAV and, as such, is subject to valuation risk and the Company can provide no assurance that the NAVs it
records from time to time will ultimately be realised
▪ The Company and the Investment Vehicle are reliant on third party service providers to carry on their businesses and a failure by one or more service providers could materially disrupt the
businesses of the Company and/or the Investment Vehicle
▪ The Company’s Investment Vehicle Interests may be redeemed or otherwise retired without the consent of the Company and will mature in 2030
▪ The Company’s Investment Vehicle Interests in which the Company invests are not traded on a stock exchange and the Company relies on the operation of the redemption facilities offered by
the Investment Vehicle in order to realise its investments
▪ The interests of the direct investors in the Investment Vehicle (excluding the Company) may not always coincide with the interests of Shareholders
▪ The investment objective, investment policy, Investment Limits or Borrowing Limit of the Investment Vehicle may materially change and the Company may not be able to redeem its entire
holding of Company Investment Vehicle Interests on a single redemption date
▪ Risk of compulsory conversion between Share classes
36APPENDIX D – PRINCIPAL RISK FACTORS
Principal Risk Factors
2. Risks relating to the Investment Vehicle
▪ No reliance should be placed by investors on the past performance of the Investment Vehicle
▪ Substantial redemptions by investors in the Investment Vehicle may cause a liquidation of the Investments which may distort the balance of the Investment Vehicle’s liquid and illiquid
Investments
▪ The Investments may be difficult to value accurately and, as a result, Investment Vehicle Interest Holders, such as the Company, may be subject to valuation risk
▪ The Investment Vehicle may mandatorily redeem an entire Series of Investment Vehicle Interests without the consent of the investors (including the Company)
▪ There is a risk that the assets of the Investment Vehicle may be made available to satisfy the liabilities of other Compartments of CECO
▪ CECO, and, by extension, the Investment Vehicle, is subject to limited regulatory supervision in Luxembourg
▪ Investment Vehicle Interest Holders other than the Company may receive information regarding the Investment Vehicle that is not received by the Company and therefore not disclosed to
Shareholders
3. Risks relating to the investment strategy of the Investment Vehicle
▪ Market factors may result in the failure of the investment strategy followed by the Investment Vehicle
▪ The investment strategy of the Investment Vehicle includes investing in sub-investment grade and unrated debt obligations which are subject to a greater risk of loss of principal than higher-
rated securities
▪ In the event of a default in relation to an Investment, the Investment Vehicle will bear a risk of loss of principal and accrued interest
▪ The illiquidity of Investments may have an adverse impact on their price and the Investment Vehicle’s ability to trade in them or require significant time for capital gains to materialise
▪ The Investment Vehicle may hold a relatively concentrated Portfolio
▪ The Investment Vehicle is exposed to foreign exchange risk, which may have an adverse impact on the value of their assets and on their results of operations
▪ The hedging arrangements of the Investment Vehicle may not be successful
▪ Under certain hedging contracts that the Investment Vehicle may enter into, the Investment Vehicle may be required to grant security interests over some of its assets to the relevant
counterparty as collateral
▪ The investment objective, investment policy, investment strategy, Investment Limits, Borrowing Limit and/or emphasis of the Investment Vehicle may change over time
▪ The use of leverage by the Investment Vehicle may increase the volatility of returns and providers of leverage would rank ahead of investors in the Investment Vehicle in the event of insolvency
▪ Interest rate fluctuations could expose the Investment Vehicle to additional costs and losses
▪ In the event of the insolvency of an underlying obligor in respect of an Investment, the return on such Investment to the Investment Vehicle may be adversely impacted by the insolvency regime
or insolvency regimes which may apply to that underlying obligor and any of its assets
37APPENDIX D – PRINCIPAL RISK FACTORS
Principal Risk Factors
▪ The Investment Vehicle may be subject to losses on Investments as a result of insolvency or clawback legislation and/or fraudulent conveyance findings by courts
▪ The collateral and security arrangements attached to an Investment may not have been properly created or perfected, or may be subject to other legal or regulatory restrictions
▪ The Investments will be based in part on valuations of collateral which are subject to assumptions and factors that may be incomplete, inherently uncertain or subject to change
4. Risks relating to the Investment Vehicle Manager
▪ The performance of the Investment Vehicle depends heavily on the skills of the Investment Vehicle Manager and its key personnel
▪ The Investment Vehicle Manager may provide services to other clients which conflict directly or indirectly with the activities of the Investment Vehicle and could prejudice investment
opportunities available to, and investment returns achieved by the Investment Vehicle. The Investment Vehicle Manager may also encounter potential conflicts of interest in connection with the
other activities of CVC Credit
▪ The due diligence process that the Investment Vehicle Manager plans to undertake in evaluating specific investment opportunities for the Investment Vehicle may not reveal all facts that may
be relevant in connection with such investment opportunities and any corporate mismanagement, fraud or accounting irregularities may materially affect the integrity of the Investment Vehicle
Manager’s due diligence on investment opportunities
▪ Performance fee arrangements with the Investment Vehicle Manager could encourage riskier investment choices that could cause significant losses for the Investment Vehicle
5. Risks relating to the Shares
▪ The Shares may trade at a discount to their Net Asset Value and Shareholders may be unable to realise their Shares on the market at the Net Asset Value per share or at any other price
▪ Shareholders have no right to have their Shares redeemed or repurchased by the Company
▪ The existence of a liquid market in the Shares cannot be guaranteed
▪ Contractual Quarterly Tenders will be subject to certain restrictions and so Shareholders should not have an expectation that all or any of the Shares they make available for sale to the
Company will be purchased through the Contractual Quarterly Tender facility
▪ Shareholders in certain jurisdictions may not be eligible to participate in Contractual Quarterly Tenders and to receive the cash proceeds thereof
▪ Sterling and US Dollar Shares will be exposed to exchange rate fluctuations
▪ Shareholders’ percentage voting rights in the Company may increase as a result of Tender Purchases and as a result there is a risk that a Shareholder may acquire 30 per cent. of the voting
rights in the Company and then be obliged under the Takeover Code to make a general offer to all the remaining Shareholders to acquire their Shares
▪ Issuance of additional Shares could have a detrimental effect on the Net Asset Value and the market price of the issued Shares
▪ The Shares will be subject to purchase and transfer restrictions in secondary transactions in the future
38APPENDIX D – PRINCIPAL RISK FACTORS
Principal Risk Factors
Risks relating to Law, Regulation and Taxation
▪ Changes in law or regulations, or a failure to comply with any laws or regulations, may adversely affect the respective businesses, investments and performance of the Company, Investment
Vehicle, CVC Credit Investment Services and Investment Vehicle Manager
▪ The European Directive on Alternative Investment Fund Managers may impair the ability of the Company to market its Shares to EU investors of the Company and gives rise to the risk that an
EU regulatory authority may determine that the Company has a third party alternative investment fund manager. The timing of any resulting licensing requirements could be problematic for the
on-going operation of the Company and the regulatory obligations applicable to the relevant third party may create significant additional compliance costs.
▪ Final regulations implementing the “Volcker Rule” in the United States of America were issued in December 2013 and became effective by operation of law on 1 April 2014, subject to a
conformance period. The final Volcker Rule regulations revised the November 2011 proposed regulations and include certain changes to the treatment of foreign funds and non-U.S. bank
investors. If the Volcker Rule applies to an investor’s ownership of Shares, the investor may be forced to sell its shares, or the continued ownership of such shares may be subject to certain
restrictions.
▪ If the Company or the Investment Vehicle become subject to tax on a net income basis in any tax jurisdiction, including Jersey, the United Kingdom and Luxembourg, the Company’s financial
condition and prospects could be materially and adversely affected
▪ The Company may be unable to maintain its non-UK tax resident status, which would adversely affect its financial and operating results, the value of the Shares and the after-tax return to
shareholders
▪ Changes in taxation legislation, or the rate of taxation, may adversely affect the Company and the Investment Vehicle
▪ UK taxpaying shareholders may be subject to income tax under the UK offshore funds regime in any tax year on amounts of income attributable to them to the extent such amounts are greater
than the dividends actually paid out by the Company in the period
▪ Different regulatory, tax or other treatment of the Company or the Shares in different jurisdictions, or changes to such treatment in different jurisdictions, may adversely impact shareholders in
certain jurisdictions
▪ The Company is not, and does not intend to become, registered in the United States as an investment company under the U.S. Investment Company Act and related rules
▪ Certain payments to the Company will in the future be subject to 30 per cent. withholding tax unless the Company agrees to certain reporting and withholding requirements and certain
shareholders will be required to provide the Company with required information so that the Company may comply with its obligations under FATCA
▪ The Anti Tax Avoidance Directive (ATAD) and related ATAD legislation may have a negative effect on Luxembourg securitisation vehicles such as the Investment Vehicle
▪ Proposed reforms to various interest rate benchmarks may affect the amounts received by the Company from its holdings of Investment Vehicle Interests
39Appendix E Disclaimer
APPENDIX E – DISCLAIMER
Disclaimer (1/2)
This presentation (the "Presentation") shall mean and include the slides that follow, the oral presentation of the slides, the question-and-answer session that follows that oral presentation, hard copies of
this document and any other materials distributed at, or in connection with, that presentation. This Presentation is provided to a limited number of institutional investors solely as a basis for discussion of the
principal terms and conditions of the securities/transaction described herein. This Presentation is confidential to the intended recipient and may not be copied or passed on, in whole or in part, or its
contents discussed with any person outside the group of affiliates of the intended recipient or their professional advisors.
Capitalised terms used in this Presentation, unless otherwise defined herein, have the meaning provided for in the Glossary of Terms.
The Presentation is published by the Company. Any matters contained in the Presentation relating to CVC Credit Partners, CVC, the Investment Vehicle Manager or the markets in which the Investment
Vehicle invests have been prepared by the Investment Vehicle Manager. The Company has relied upon and assumed (without independent verification) the accuracy of such information. The Presentation
is not an offering of, or a solicitation of an offer to buy, securities in any jurisdiction and any investor that subsequently acquires any interest may only rely on the terms of and disclosure in a final form
prospectus (the “Prospectus”). The Presentation has not been approved by any supervisory authority and no regulatory approvals have been obtained.
The information contained in the Presentation has not been independently verified and no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness,
accuracy, completeness or correctness of the information or opinions expressed herein. The Company has, however, taken reasonable steps to ensure that this Presentation and the information contained
herein is not misleading, false or deceptive.
Persons into whose possession this Presentation has come are deemed to have ensured that their receipt of this Presentation is in compliance with the laws applicable to them. Nothing contained herein
shall be deemed to be binding against, or to create any liability, obligations or commitment on the part of the Company, its directors and officers or CVC Credit Partners. Neither the existence nor the
contents of this document is to be construed as investment, legal or tax advice and neither the Company, CVC Credit Partners nor any of their respective directors, officers, employees, partners, members,
shareholders, advisers, agents or affiliates make any representation or warranty, express or implied as to the fairness, correctness, accuracy or completeness of this Presentation, and nothing contained
herein shall be relied upon as a promise or representation whether as to past or future performance or otherwise. The market value of any structured instrument, such as the investment, may be affected by
changes in economic, financial, and political factors (including, but not limited to, spot and forward interest and exchange rates), time to maturity, market conditions and volatility and the credit quality of any
issuer or reference issuer. There is no certainty that the parameters and assumptions used can be duplicated with actual trades or investments. There can be no assurance that the strategy described
herein will meet its objectives generally, or avoid losses. Accordingly, prospective investors should have a high level of financial sophistication and the ability to understand and accept investment risks.
Prior to making any potential investment, potential investors should, at their own expense, consult with their own legal, investment, accounting, regulatory, tax and other advisors to determine the
consequences of the potential investment opportunity described herein and to arrive at an independent evaluation of such potential investment opportunity.
The Presentation contains certain “forward-looking statements” regarding the belief or current expectations of the Company, CVC Credit Partners and members of its senior management about the
Company’s financial condition, results of operations and business. Such forward-looking statements are not guarantees of future performance. Rather, they are based on current views and assumptions
and involve known and unknown risks, uncertainties and other factors, many of which are outside the control of the Company and are difficult to predict, that may cause the actual results, performance,
achievements or developments of the Company or the industry in which it operates to differ materially from any future results, performance, achievements or developments expressed or implied from the
forward-looking statements. The statements herein are not intended to predict any future events. Past performance is not an indication of future performance. This communication is only addressed to, and
directed at, persons in member states of the European Economic Area who are "qualified investors" within the meaning of Article 2(1)(e) of the Prospectus Directive ("Qualified Investors"). For the
purposes of this provision, the expression "Prospectus Directive" means Directive 2003/71/EC and includes any relevant implementing measure in each member state of the European Economic Area
which has implemented the Prospectus Directive.
41APPENDIX E – DISCLAIMER
Disclaimer (1/2)
In addition, in the United Kingdom, this communication is being distributed only to, and is directed only at, Qualified Investors (i) who have professional experience in matters relating to investments who
fall within the definition of "investment professional" in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order") or (ii) who are high net
worth companies, unincorporated associations and partnerships and trustees of high value trusts as described in Article 49(2) of the Order, and (iii) other persons to whom it may otherwise lawfully be
communicated (all such persons together being referred to as "relevant persons"). Any investment or investment activity to which this communication relates is available only to and will only be engaged in
with such persons. This communication must not be acted on or relied on (i) in the United Kingdom, by persons who are not relevant persons, and (ii) in any member state of the European Economic Area
other than the United Kingdom, by persons who are not Qualified Investors. This document is an advertisement and not a prospectus, and investors should not subscribe for or purchase any shares
referred to in the presentation, except on the basis of the information to be contained in the Prospectus which is expected be published in due course and which will, following publication, be made
available to the public in accordance with any applicable legal and regulatory requirements.
The information and opinions contained in the Presentation do not purport to be comprehensive, are provided as at the date of the document and are subject to change without notice. Neither the
Company nor CVC Credit Partners, nor any other person is under any obligation to update or keep current the information contained herein. No part of the Presentation, nor the fact of its publication,
should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever.
The target dividend, target return and target allocation of the Company or the Investment Vehicle referred to in this Presentation are based on performance projections produced by CVC Credit Partners to
the best of their knowledge and belief. There is no guarantee that these projections will be achieved and past or targeted performance is no indication of current or future performance results. The return,
dividend and allocation figures quoted are targets only and are based over the long-term on the performance projections of the investment strategy and market interest rates at the time of modelling and
therefore are subject to change. There is no guarantee that such target dividend, target return and target allocation of the Company or the Investment Vehicle can be achieved. Investors should not place
any reliance on such targets in deciding whether to invest in the Company.
This Presentation is not for release, publication or distribution, directly or indirectly, in or into the United States, Australia, Canada, South Africa or Japan or to US Persons as defined in Regulation S under
the US Securities Act ("US Persons"). The information contained herein does not constitute or form part of any offer or solicitation to purchase or subscribe for securities in the United States, Australia,
Canada, South Africa or Japan or any other jurisdiction where to do so might constitute a violation of the relevant laws or regulations of such jurisdiction.
The Company has not been and will not be registered under the US Investment Company Act of 1940, as amended (the "Investment Company Act") and, as such, holders of the Company's securities will
not be entitled to the benefits of the Investment Company Act. The securities discussed herein have not been and will not be registered under the US Securities Act of 1933, as amended (the "US
Securities Act"), or with any securities regulatory authority of any state or other jurisdiction of the United States and may not be offered or sold in the United States or to, or for the account or benefit of, US
persons absent registration or an exemption from registration under the US Securities Act in a manner that would not require the Company to register under the US Investment Company Act 1940. No
public offering of securities will be made in the United States. No securities may be offered or sold, directly or indirectly, into the United States to US persons absent registration or an exemption from
registration under the US Securities Act and in a manner that would not require the Company to register under the US Investment Company Act of 1940
42You can also read
