The enclosed materials contain general information about MGG Investment Group LP (the “Investment Manager”) and its advisory client funds. The enclosed materials are being provided to you on a confidential basis for informational and discussion purposes only, in response to your specific request. The enclosed materials contain only a summary of key information, are not complete, and do not contain certain material information about funds or future-related funds (collectively, the “Funds”) managed by the Investment Manager, including important conflicts disclosures and risk factors associated with an investment in the Funds. The enclosed materials are not an offer to sell or a solicitation of an offer to purchase interests in any Fund, nor do they constitute a financial promotion, investment advice or an inducement or incitement to participate in any product, offering or investment, nor do they suggest, implicitly or otherwise, that the Funds have received regulatory approval. Offers and sales will be made only in accordance with the applicable securities laws pursuant to a confidential private placement memorandum (“PPM”), which describes risks related to an investment in the Funds, the Limited Partnership Agreement and the Subscription Agreement relating to the applicable Fund (collectively, the “Agreements”), each of which will qualify all the information contained in the enclosed materials. The Agreements should be read in their entirety and carefully prior to investment.
The enclosed materials are intended exclusively for the use of the person to whom it was delivered. The information contained herein is intended solely for “qualified purchasers” as that term is defined in the U.S. Investment Company Act of 1940 or “institutional investors” as that term is defined in FINRA Rule 2210. The information contained herein does not take into account the particular investment objectives, needs or financial circumstances of any specific person who may receive it and is not tailored in any way. Strategies discussed herein may involve investments in less liquid securities as well as leverage. Due to the potential volatility of net asset values, these products are intended for sophisticated investors who meet certain eligibility requirements, have no need for immediate liquidity in their investment, and can bear the risk of an investment in the relevant Fund for an extended period of time. You and your adviser(s) should consider any legal, tax, and accounting matters relevant to any investments discussed herein or arising therefrom. If you are subject to ERISA, this presentation is being furnished to you on the condition that it will not form a primary basis for any investment decision. The past performance of the Funds or any other investment vehicle or account managed or advised by the Principals of the Investment Manager is not necessarily indicative of the future results of the Funds, is presented net of all fees and expenses, and represents the reinvestment of all dividends, interests, and profits, and new issue profits and losses.
The information in this document is highly confidential and is being provided for your confidential use with the express understanding that, without prior written permission, you will not release this document, in whole or in part, or discuss the information contained herein or make reproduction of or use this memorandum for any purpose other than a preliminary evaluation of the information contained herein. Each person accepting the enclosed materials thereby agrees to return them promptly upon request. Notwithstanding anything to the contrary herein, each recipient of this presentation may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of: (i) the Funds and (ii) any of the Funds’ transactions, and all materials of any kind (including opinions or other tax analyses) relating to such tax treatment and tax structure. The distribution of the information contained herein in certain jurisdictions may be restricted, and, accordingly, it is the responsibility of any prospective investor to satisfy itself as to compliance with relevant laws and regulations.
The information contained herein has been prepared from original sources and data we believe to be reliable. No representation, warranty or undertaking, express or implied, is given as to the accuracy or completeness of the information or opinions contained in the enclosed materials by the Investment Manager, the Funds, their members, shareholders, directors, general partners, investment advisers, or respective affiliates or employees, and no liability is accepted by such persons for the accuracy or completeness of any such information or opinions. The Investment Manager disclaims any obligation to update this document and the information contained herein is subject to change without notice.
Although not disclosed in these materials, upon request, MGG will provide contact information to inquire about the past performance of the investments overseen by the Chief Investment Officer during his tenure at Highbridge Principal Strategies. Please email gracz@mgginv.com if you would like more information.
Source: Cambridge Associates LLC. Private Credit Index and Benchmark Statistics, as of September 30, 2023. The data was provided to MGG “AS IS” and at no cost. Although no vehicle managed by MGG was actually included in the report by Cambridge Associates, the top quartile designation above represents the expected ranking of the relevant fund or strategy, using its net IRR during the relevant vintage year as compared to 100 senior debt funds, including fully liquidated partnerships, formed between 2000 and 2021, and of the same vintage year within Cambridge Associates’ report. Partnership financial statements and narratives are the primary source of information concerning cash flows and ending residual/ net asset values (NAV) for both partnerships and portfolio company investments. Cambridge Associates uses both the since inception internal rate of return and the end-to- end or horizon performance calculation in its benchmark reports. Internal rates of returns are net of fees, expenses and carried interest. Cambridge Associates research shows that most funds take at least six years to settle into their final quartile ranking, and previous to this settling they typically rank in 2-3 other quartiles; therefore, benchmark performance metrics from more recent vintage years may be less meaningful. Benchmarks with “—” have an insufficient number of funds in the vintage year sample to produce a meaningful return. The risks inherent in such a comparison to Cambridge Associates’ report include, but are not limited to, that the MGG vehicle inception does not match the inception of the Cambridge Associates report period, which in the aggregate has witnessed multiple credit cycles not similarly witnessed by the fund or the strategy. The following strategies or funds are compared to the benchmark: all 2016 vintages within the Drawdown Fund I strategy, all 2018 vintages within the Evergreen Unlevered Offshore strategy, all 2016 vintages within the Evergreen Levered Offshore strategy, MGG SF Evergreen Master Fund (Cayman) LP launched in 2016, MGG SF Drawdown Unlevered Fund LP launched in 2016, MGG SF Drawdown Master Fund (Cayman) LP launched in 2016, Structured Solutions hypothetical portfolio composite (2015-2019), MGG Structured Solutions Fund LP and MGG Structured Solutions Fund (Cayman) LP launched in 2020, MGG Structured Solutions Fund II Cayman) LP launched in 2021, and the hypothetical Structured Solutions portfolio composite (2015-2019) if the investments in the MGG Direct Lending vehicles had been deployed through a hypothetical Structured Solutions vehicle.
Past performance is not indicative of future results. There is no guarantee or assurance that the fund will be successful in committing or deploying capital. The returns may change materially after the manager’s underwriting of the investment, and may not be indicative of the fund’s and the investment’s performance over time. In some cases, the calculations shown herein do not reflect a single fund and may instead include multiple funds, and therefore may not necessarily reflect an actual fund. The data shown herein is estimated, unaudited, and subject to change. Strategy statistics aggregates or averages all investments in all Funds in the Strategy but exclude certain smaller investments (eg, equal to or less than 1% of assets or revolvers) or investments held for cash management or for shortterm (rather than to maturity). The characteristics of the investments in the funds in the Flagship Strategy is as of a point in time. There is no guarantee or assurance that the Fund will successfully make funded or unfunded investments or that funded or unfunded investments will share any of the criteria of current investments. There can be no assurance that the funds will continue to hold such investments or will invest in such types of investments in the future.
Net (Gross of Incentive) Return is calculated before incentive allocation but net of expenses and management fees incurred at the Fund level. Net return is calculated after all expenses, management fees and estimated incentive allocation/fee. Net (Gross of Incentive) and Net Returns reflect actual fees and returns achieved at the Fund level but are not intended to be representative of the fees and returns achieved by any actual investor. Modeled YTD Highest Fee return and Modeled ITD Net IRR Highest Fee are each calculated by reducing the respective YTD gross and net return or Inception to Date Net IRR, as applicable, by a percentage that represents the delta between the inception to date fees actually incurred by the Fund and the inception to date fees that would have been incurred by the Fund, on a proforma basis, if management and incentive allocation/ fees were charged to all investors at the highest rate as mentioned in the Fund governing documents. Modeled YTD Highest Fees returns, and Modeled ITD Net IRR Highest Fee are hypothetical, fund-level approximations and are not necessarily reflective of the returns achieved by any actual investor. Additionally, the Modeled ITD Net IRR Highest Fee does not account for the timing of cash flows when applying the percentage delta described above to the Inception to Date Net IRR. The above information may not take into account OID, exit/prepayment fees and warrants that may be realized in the future, accordingly, the eventual returns are expected to be higher but there is no guarantee. Past performance is not indicative of future results. There is no guarantee or assurance that the Fund will successfully make funded or unfunded investments or that funded or unfunded investments will share any of the criteria regarding current investments. The returns may change materially before the investments are exited and may not be indicative of the Fund’s performance over time. Should there be a default, loss or write-down or write- off, the ultimate returns to an investor would be materially different. The above amounts are estimated, unaudited, and subject to changes.
MGG drawdown funds launched after June 2023 are using equalization methodology to calculate investor allocations. As such, consistent with industry standards, such funds will only report fund-level and investor-level IRRs.
The risk factors described herein do not purport to be a complete description of investment risks in the Funds. Investors should read the complete PPM which contains comprehensive risk and conflict of interest disclosures before making any decision whether or not to invest in the Funds. Investing in financial markets involves a substantial degree of risk. There is no guarantee or representation that the investment program, including, without limitation, its investment objectives, diversification strategies, or risk monitoring goals, will be successful, and investment results may vary substantially over time. Any investment in the Funds is speculative, involves a high degree of risk, and is illiquid. Nothing herein is intended to imply that the Fund’s investment methodology may be considered “conservative,” “safe,” “risk free,” or “risk averse.” Economic, market, and other conditions could also cause the Fund to alter its investment objectives, guidelines, and restrictions. Investors in the Funds can lose all or a significant portion of their investment. Accordingly, the following should be considered before making an investment in a Fund:
No Assurance of Investment Return – The Funds may have recently commenced operations and, therefore, have no performance history. Information contained herein relating to the performance of prior investments made and managed by the principals is not necessarily indicative of the future performance of the Funds. This presentation contains current market views, opinions, and expectations of MGG based on its historic experience and proprietary research. Historic market trends are not reliable indicators of actual future market behavior or future performance of any particular investment of any Fund which may differ materially, and are not to be relied upon as such. There can be no assurance that investors in any Fund or account will receive a return of capital or certain level of return.
Investment Risks – The value of a security or securities may fall due to economic, political, or business developments that affect the securities markets generally, and entire industry or sector, or a particular company. The Funds’ performance may be volatile. The Funds may use leverage and/or derivative instruments (such as futures, options and short sales), which may result in greater losses to investors and increased volatility. In addition, the Funds’ fees and expenses may offset their profits. The payment of a performance- based fee to the Investment Manager may incentivize the Investment Manager to make riskier investments than it would otherwise. The value at which Fund investments can be liquidated may differ, sometimes significantly, from interim valuations determined by the Fund due in part to the size, concentration or illiquidity of positions held by the Fund or for other reasons. The Fund may invest in non-U.S. securities which may expose investments to currency fluctuation as well as other risks, such as greater liquidity, higher fees, and greater instability. Other investment risks include those related to investing in loans and other debt instruments and investing in the middle market, which are less liquid and have greater risk than other investments, fraud risk, the inability to source or obtain loans on advantageous terms and the risk of lender liability, among other risks.
Investment and Due Diligence Process – Before making investments, the Investment Manager will conduct due diligence that it deems reasonable and appropriate to evaluate important and complex business, financial, tax, accounting and legal issues. The Investment Manager will rely on the resources reasonably available to it, which may not be sufficient, accurate, complete or reliable. Due diligence may not reveal or highlight matters that could have a material adverse effect on the value of an investment.
Limited Transferability of Interests in the Fund – There are restrictions on withdrawing and transferring interests from the Funds. The interests in the Fund are highly illiquid, have no public market and are not transferable except with the consent of the general partner of the relevant Fund. There is no secondary market for investors’ interests in the Funds and none is expected to develop.
Dependence on Investment Manager – The Limited Partner will have no right or power to participate in the management of the Fund, and may receive limited information regarding valuations and pricing. The Limited Partner must rely on the Investment Manager to make investment decisions consistent with the Fund’s investment objectives and policies. The Investment Manager has complete trading authority with respect to Fund investments and as a result the portfolio of the Fund could be highly concentrated with consequently higher risk. The Investment Manager may cause the Fund to incur losses or miss opportunities to make profitable investments.
In making an investment decision, you must rely solely on your own examination of the Funds and the terms of the applicable offering, including the merits and risks involved, and not on any information or representation made or alleged to have been made herein or otherwise.. You should not construe the contents of the enclosed materials as legal, tax, investment, or other advice.
The Fund does not intend to register as an investment company under the U.S. Investment Company Act of 1940 or similar laws or regulations so such laws or regulations will not be applicable. Additionally, the Fund has not been and will not be registered under the United States Securities Act of 1933, as amended (“the 1933 Act”) or the securities laws of any of the states of the United States. The interests in the Fund may not be offered, sold or delivered directly or indirectly in the United States or to or for the account or benefit of any “US Person” except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the 1933 Act and any applicable state laws. The interests in the Fund are being offered outside the United States pursuant to the exemption from registration under Regulation S under the 1933 Act and inside the United States in reliance on Regulation D promulgated under the 1933 Act and Section 4(a)(2) thereof. There is no public market for the Fund and no such market is expected to develop in the future. PJT Park Hill operates as the alternative asset advisory and fundraising services practice group of PJT Partners LP (together with its affiliates and their respective officers, directors, partners, unit holders, managers, members and employees, collectively, “PJT Park Hill”), an SEC registered broker-dealer and a member of FINRA and SIPC. PJT Park Hill is acting as placement agent for the Fund’s manager (together with its affiliates, the “Fund Sponsor”), and, in that capacity, is not acting as an adviser or fiduciary to prospective investors.
Prospective investors should be aware that PJT Park Hill’s statements in this and other communications regarding the Fund Sponsor or its fund vehicles or accounts may constitute endorsements and/or testimonials under applicable U.S. regulations. PJT Park Hill expects to receive cash compensation and/or may receive noncash compensation in connection with soliciting prospective investors, including compensation based on capital raised. PJT Park Hill may also seek to do business with and earn fees or commissions from the Fund Sponsor, including, the Fund and its portfolio companies. PJT Park Hill is not a current client of the Fund Sponsor or an investor of the Fund, although certain PJT Park Hill employees may be, or may subsequently become, a client of the Fund Sponsor or an investor of the Fund. The payment of cash or noncash compensation to PJT Park Hill, and any additional relationships that PJT Partners or our affiliates may have with the Fund Sponsor or its managed vehicles, results in material conflicts of interests for PJT Partners in our role as placement agent, including an incentive to endorse the Fund Manager, its funds and accounts. Prospective investors should consider these potential conflicts in making their investment decisions. By investing in the Fund, prospective investors will be deemed to have consented to these potential conflicts and acknowledge that these potential conflicts are not material to their decision to provide such consent.
This material is not intended for distribution to retail clients, as that term is defined under the European Union Markets in Financial Instruments Directive (2004/39/EC), or retail customers, as defined and interpreted by Rule 15l-1 under the U.S. Securities Exchange Act of 1934. No retail client or retail customer are to be solicited by us and such parties shall not consider this an endorsement of the Fund Sponsor or any of its fund vehicles or accounts.
PJT Partners is represented in the United Kingdom by PJT Partners (UK) Limited. PJT Partners (UK) Limited is authorised and regulated by the Financial Conduct Authority (Ref No. 678983) and is a Company registered in England and Wales (No. 9424559). PJT Partners is represented in the European Economic Area (EEA) by PJT Partners Park Hill (Spain) A.V., S.A.U., a firm authorized and regulated by the Comision Nacional del Mercado de Valores (“CNMV”). PJT Partners is represented in Hong Kong by PJT Partners (HK) Limited, authorised and regulated by the Securities and Futures Commission; in Australia, by PJT Partners (HK) Limited, by relying on passport license approved by the Australia Securities and Investment Commission. In connection with PJT’s capital raising services in Canada, PJT Partners LP relies on the international dealer exemption pursuant to subsection 8.18(2) of National Instrument 31-103 Registration Requirements. Please see https://pjtpartners.com/regulatory-disclosure for more information.
PJT Park Hill expressly disclaims any representation or warranty regarding the accuracy or completeness of the information or forward-looking statements contained herein or the performance of the Fund. PJT Partners does not have any obligation to update the information contained herein and nothing contained herein should be relied upon as a promise or representation as to past or future performance. Unless governing law permits otherwise, you must contact a PJT Partners entity in your home jurisdiction if you want to use our services in effecting a transaction in the securities referred to herein.
All preceding paragraphs also apply to Hollister Associates, LLC as placement agent, as applicable.
Cambridge Associates LLC. Private Credit Index and Benchmark Statistics, as of December 31, 2023. The data was provided to MGG “AS IS” and at no cost. The top quartile designation above represents a comparison of the relevant MGG strategy to the Cambridge Senior Debt and Cambridge Private Credit rankings of the most relevant year, using the composite net IRR, modeled for highest fees and expenses. MGG data was not included in Cambridge rankings. Cambridge rankings include fully liquidated partnerships, formed between 2000 and 2021. Partnership financial statements and narratives are the primary source of information concerning cash flows and ending residual/ net asset values (NAV) for both partnerships and portfolio company investments. Cambridge Associates uses both the since inception internal rate of return and the end-to-end or horizon performance calculation in its benchmark reports. Internal rates of returns are net of fees, expenses and carried interest. Cambridge Associates research shows that most funds take at least six years to settle into their final quartile ranking, and previous to this settling they typically rank in 2-3 other quartiles; therefore, benchmark performance metrics from more recent vintage years may be less meaningful. Benchmarks with “—” have an insufficient number of funds in the vintage year sample to produce a meaningful return. The risks inherent in such a comparison to Cambridge rankings include, but are not limited to, that the MGG vehicle inception does not match the inception of the Cambridge rankings period, which in the aggregate has witnessed multiple credit cycles not similarly witnessed by the fund or the strategy or that the underlying methodology from Cambridge rankings differ from MGG’s comparative assumptions.
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