The Flight and Partners Recovery Fund Limited (the “Fund”) is a Guernsey-domiciled closed-ended investment company listed on The International Stock Exchange (“TISE”). The Fund was incorporated in January 2008 and first admitted to the Official List of TISE in March 2008
The Fund invests in special situations debt transactions originated and managed by Rcapital Partners LLP (“Rcapital”) in its role as Investment Adviser to the Fund. The Fund aims to generate an attractive mix of income and downside protection afforded by investment in secured loans at minimum yields of 10%, with the opportunity for further equity upside at nil or nominal cost.
Rcapital is a special situations investment firm that has been operating since 2004 and has made over 80 investments in this period. Flight & Partners Limited, an FCA authorised UK company, acts as the Manager of the Fund.
The Fund aims to achieve attractive risk-adjusted returns over the economic cycle through investment in stressed and distressed small- to medium-sized UK businesses with a fundamentally sound business model that offer strong prospects for recovery.
The Fund invests in transactions that are originated, executed and managed by Rcapital in its role as Investment Adviser to the Fund. Rcapital aims to use its financial restructuring and operational turnaround capabilities to improve the performance of acquired businesses.
The Fund’s investments are made in the form of loans that are secured against the underlying assets in the investee company. Loans are provided at a minimum interest rate of 10% or 6% over base rate, whichever is higher. The Fund also receives an equity stake at nominal cost, equal to 30% of Rcapital’s overall equity position in the investee company.
The Fund’s investments are valued in accordance with the International Private Equity and Venture Capital valuation guidelines (IPEV). Equity interests in investee companies are reviewed with the Auditors and, where they are deemed to have value, this is included in the net asset value of the Fund.
The Directors consider that the primary attractions of the Fund are as follows:
- Downside protection offered through investments in the form of secured loans
- Attractive income yield on loans
- Equity upside received at nominal cost
- Access to Rcapital’s deal flow and restructuring expertise
- It benefits from an obligation by Rcapital to make good any losses on loans from the realisation of its equity interests in Fund companies
Past performance of the Fund over the 7 years to 30 June 2021 is as follows (also per the below table):
- Last 3 years: up 33.5%
- Last 5 years: up 72.5%
- Last 7 years: up 92.7%
Please note that past performance is no guarantee of future results.
The Fund is only suitable for accredited investors and is not permitted to accept investment from retail investors. Investors may lose some or all of their investment in the Fund and the Fund offers limited liquidity. If you qualify as an accredited investor and would like to receive further information on the Fund, please submit your details. Interested parties should seek appropriate professional advice before making any investment decisions.
PRIIPS Regulation Key Information Document
Under the EU’s Packaged Retail and Insurance-based Investment Products (‘PRIIPs’) Regulation, Flight & Partners is required to produce a Key Information Document (‘KID’) setting out prescribed information regarding the shares in the Fund. Please use the below link to download the KID.
The performance and costs disclosures contained in the KID and the methods by which they are calculated are strictly prescribed by the PRIIPs Regulation and may differ from the ways in which we present our own financial information.
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Contact Alex John for more information