OAFIT - Strategy - Oceana Funds

Combining private equity and credit underwriting expertise, OAFIT offers alternative asset-backed investments to suit income-oriented investors.

OAFIT is a securitized portfolio of Asset Backed Securities (‘’ABS’’). The trust applies the principals of securitization across the private debt sector and is unique in its value proposition by providing access to a range of private debt investments including, invoice and supplier finance, corporate lending, and SME loans, within a risk mitigated strategy.
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OAFIT offers first-loss protection and credit enhancement to all investors across its capital structures with the principals participating in the first-loss piece of the structure.

OAFIT’s fixed income portfolio aims to provide regular distributions, and its typically short-term loan bias also seeks to offer liquidity in a traditionally ‘’illiquid’’ asset class. We have a 9-year audited track record and count some of the world’s largest asset managers and credit funds in our capital table. The trust is supported by ~100 FTE across its underlying funding vehicles and accesses market leading technology and systems architecture in its portfolio management.

Underwriting and Risk Management

Credit Risk Management

Policy setting and governance oversight by Board, Credit, Investment and Compliance Committees – all having non-executive representation.
Strict adherence to Credit Policies, procedures, and eligibility criteria.
Credit enhancement via the use of structural subordination, collateralisation and the use of trade credit and other insurance policies where possible.

Portfolio Characteristics

Diversification by obligor, sector, and asset category.
Short duration and largely self-liquidating assets.
Low statistical default probabilities (not greater than 1% based on track record of Fund Manager)

Tight Control

Proprietary asset and liability credit management systems assist in the achieving integrity and consistency in credit decisions and underlying receivables management.
Scalable technology provides efficiency in short-term, small amount credit contracts.
Important internal separation of credit approval and payment processing.

Expected Loss Calculations & Provisioning

The Trust Manager assigns a probable default rate and loss given default rate to underlying exposures using statistical and independent credit scoring data.
Access to insurance and other security arrangements are taken into account when assessing the risk of each underlying asset to arrive at a probable loss for each investment and the portfolio as a whole.
The trust will maintain access to loss reserves/provisions not less than 2 x Expected Loss.

Enhancement through insurance and structural subordination credit enhancement

The trust enhances the credit profile of its underlying investment portfolio via the use of insurance and structural subordination.
Trade Credit Insurance (TCI) is used to cover payment obligations arising in connection with business-to-business trade.
Structural subordination also known as “first-loss” protection is available to all Noteholders, with a Series Notice requirement minimum of at least 10%.
TCI and structural subordination are not used as substitutes for sound credit decisions, please see the Risk Management section of this website for further information.

Strategy

Combining private equity and credit underwriting expertise, OAFIT offers alternative asset-backed investments to suit income-oriented investors.

Capital protection is our first priority.

Underwriting and Risk Management