The Fund’s objective is to generate steadily compounding returns for income and growth-orientated investors with a long-term investment horizon. It utilises LGB’s expertise in secured SME lending and fixed income investing.

The LGB SME Fund is authorised by the Guernsey Financial Services Commission and is available in the UK on a restricted basis to Investment Professionals, High Net Worth Investors and Sophisticated Investors. For more information, including fees, please click here.

LGB Investments

Medium Term Notes

The fund provides steadily compounding returns by investing in medium term note programmes (MTNs) principally arranged by LGB Capital Markets. It is suitable for income-orientated investors and can form a strong foundation for growth company portfolios. LGB Investments acts as the investment advisor to the local investment manager. Subscriptions are made through the LGB Investments platform or through an investment account at Heritage Capital Management Limited in London. Contact us to learn more.

Asset Allocation and Sourcing

The fund seeks to maintain an asset allocation of around 95% in secured corporate loans and MTN programmes. It targets a net return to investors of c.6.5% p.a.

Mainly originated from LGB Capital Markets, these loans are generally issued under the terms of note programmes or bilateral loan facilities.

Issues by private equity-backed companies with a high level of gearing and limited covenants are avoided.

The fund will maintain cash equal to at least 5% of its NAV at month-end. This includes interest and redemption payments received during the month.

Risk Management

The portfolio of MTNs and loans is managed with appropriate levels of portfolio risk and diversification. The fund aims to build a laddered portfolio of short term note issues in order to have regular cash flow in the portfolio and offer a balance of attractive returns and investor protections. A portion of the investments is amortising.

Factors considered to limit risk and achieve sufficient diversification include the number of issuers in the portfolio, the maturity profiles of issues, the credit standing of issues in the portfolio (reflecting the maturity of issuers and security arrangements) and business sectors.

LGB SME Fund Structure

LGB SME Fund Structure

Click here for the scheme particulars.

Key facts

6.5% p.a.

The target investment return*

£20,000

The minimum investment in the LGB SME Fund

Roll-up

The LGB SME Fund is a Guernsey-based roll-up fund

Monthly

We offer monthly subscriptions and redemptions

Managed

The LGB SME Fund is managed by Heritage Fund Managers Limited