Products

Kapstream’s flagship global absolute return strategy is managed using an innovative approach to fixed income, balancing the interests of capital preservation with the generation of consistent and stable income, and, free from conventional constraints in sourcing the most compelling fixed income investment opportunities in Australia and around the world, according to our global macroeconomic views.

Invest in Kapstream Products

  1. Kapstream Absolute Return Income Fund

  2. Kapstream Absolute Return Income Plus Fund

  3. Kapstream Private Investment Fund

Kapstream Absolute Return Income Fund

Investment Objective

Managed to Kapstream’s flagship investment strategy, the Fund aims to deliver an absolute return superior to cash benchmarks, generating stable and consistent income while preserving capital and minimising downside loss.

Application

Investors seeking to replace or complement their cash and/or traditional benchmark-oriented fixed income exposure.

Investment Universe

The fund may invest in, but is not limited to:

  1. Government & government-related bonds
  2. Corporate bonds
  3. Mortgage-backed & asset-backed securities
  4. Emerging market debt
  5. Convertible securities
  6. Cash & cash-related instruments
  7. Derivatives, including swaps, options, & futures
Investment Parameters
  1. Volatility Limit  <1.5% annualised
  2. Duration Limits -2 to +2 years
  3. Investment Grade Range 85-100%
  4. High Yield & Emerging Market Range 0-15%
  5. Cash Range 0-100%
Responsible Entity

Interests in the Kapstream Absolute Return Income Fund are offered by Fidante Partners Limited who provide a range of administration and distribution services to Kapstream, and are the Responsible Entity for the Fund. By clicking on the links to Fund documents provided below (and elsewhere on Kapstreams website) you will be re-directed to the Fidante website.

Kapstream Absolute Return Income Plus Fund

Investment Objective

The fund aims to provide a superior stream of income and capital stability over the medium term while aiming to outperform its benchmark through market cycles.

Application

Investors seeking to enhance their overall fixed income returns with a higher yielding, predominantly investment grade (IG), absolute return-oriented global fixed income portfolio.

Investment Universe

The fund may invest in, but is not limited to:

  1. Government & government-related bonds
  2. Corporate bonds
  3. Mortgage-backed & asset-backed securities
  4. Emerging market debt
  5. High yield securities
  6. Convertible securities
  7. Cash & cash-related instruments
  8. Derivatives, including swaps, options, & futures
  9. Warehouse Loans
Investment Parameters
  1. Volatility Limit  <3% annualised
  2. Duration Limits -2 to +2 years
  3. Investment Grade Range 75-100%
  4. High Yield & Emerging Market Range 0-25%
  5. Cash Range 0-100%
Responsible Entity

Interests in the Kapstream Absolute Return Income Plus Fund are offered by Fidante Partners Limited who provide a range of administration and distribution services to Kapstream, and are the Responsible Entity for the Fund. By clicking on the links to Fund documents provided below (and elsewhere on Kapstreams website) you will be re-directed to the Fidante website.

Kapstream Private Investment Fund

Fund Description

The Fund offers investors access to higher yielding investments predominantly in Australian securitised ‘warehouse’ finance originators, exploiting the attractive illiquidity premia that exists in warehouse investments compared to the public market. Warehouse financing is a form of private debt securitisation providing capital to lenders to ‘on-lend’, and is a critical part of most lending businesses, commonly among nonbanks. Underlying borrowers are diversified across mortgage, auto, personal, professional, and other loan types.

What is Warehouse Financing?
  1. Typically 1 yr facilities funding loans until ‘termed out’ into public MBS or ABS markets
  2. Banks provide senior funding (with lowest return & risk), we focus on the middle ‘mezzanine’ notes, which offer attractive return & risk profiles
  3. Originators normally invest their own capital in the bottom (junior/equity) notes, which suffer any losses first, creating a large incentive to originate high quality loans
  4. Credit protections include stop funding and amortisation events (arrears and loss triggers) protecting financiers by ceasing lending and repaying if lending deteriorates
  5. Nonbank warehouse market size estimated at ~$200bn ($2tn loans x 10% NBL share)
Objectives
  1. High stable income
  2. Capital preservation
  3. Target return RBA cash + 6%
Portfolio Role
  1. Diversified and conservative private debt allocation
  2. High yielding low volatility defensive alternatives allocation
  3. Illiquid higher yielding compliment to conventional fixed income

For more information, please contact Kapstream on 02 9234 0000 or info@kapstream.com or visit www.kapstream.com

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KARIF Product Disclosure Statement
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KARIF Additional Information Booklet
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KARIF Annual Report
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The global absolute return fixed income specialist.