04 Jun Q3 2018 Commentary
The Fund returned +1.76% in the third quarter of 2018, bringing year-to-date performance up to +4.88%. This performance compares favorably to fixed income and hedge fund indices over the same periods. With relatively steady positive performance each month, the Fund has continued to display limited correlation or beta to public market indices.
In terms of performance attribution, most exposures performed at or near expectations. The Fund’s allocation to specialized care in the UK provided some upside surprise in July. Elevated cash holdings in August, due to a delayed capital call, weighed on returns somewhat that month.
Over the quarter, the Fund executed new investments in the areas of transportation, litigation and portfolio finance. The Fund increased existing exposure to real estate debt, in the form of bridge lending to skilled nursing facilities, as well as an upsized position in an offshore consumer specialty finance originator. The new investments were funded by a combination of investor inflows as well as reductions in warehouse facilities, small business receivables and tradeable securities.