Alternative Investment

Alternative Credit Income Fund (RCIIX) Celebrates Outperformance at 2nd Anniversary under BC Partners

NEW YORK, Nov. 18, 2022 /PRNewswire/ — The Alternative Credit Income (the “Fund”) (tickers: RCIIX, RCIAX, RCIWX, RCICX, RCILX), a closed-end interval fund, marked the second anniversary with its Investment Advisor, BC Partners. Leveraging BC Partner’s proprietary access to institutional-level private deals, the Fund has outpaced fixed income indices and competing funds.

As of November 1, 2022, the Fund generated a cumulative return of 19.65% under BC Partners. Cumulative returns for fixed income benchmarks over that timeframe include the Barclay’s U.S. Aggregate Total Return Value Index (-15.98%), the Morningstar LSTA Leveraged Loan Total Return Index (+6.68%) and the Bank of America High Yield Index (-2.15%).1

“Shifting monetary policy and changes in market structure, though challenging for traditional fixed income in recent years, have acted as tailwinds for alternative credit investors,” said portfolio manager Mike Terwilliger. “By navigating this market context, our Fund is the top performing corporate credit interval fund amongst our peers and has outpaced all relevant fixed income benchmarks since joining BC Partners in 2020.”2

Ted Goldthorpe, CEO of BC Partners Credit added, “We continue to capitalize on our proprietary pipeline of directly originated deals, and as public markets have sold-off we are now also seeing opportunities that would have been inconceivable just twelve months ago. Few times in my career have provided such an attractive backdrop for credit investing.”

The Fund’s focus on delivering competitive returns to investors as well as reducing volatility, has helped generate a 3.53% Sharpe ratio under BC Partners.3

“People may recall the adage T.I.N.A. or There is No Alternative to describe investors plowing money in stocks over the previous decade when rates were at rock bottom levels. Now, with equity market valuations remaining lofty, traditional fixed income un-investable as interest rates marching higher, we would characterize the current market as ‘T.I.N.A in Reverse.’ Investors must expand their use of non-traditional credit and private credit in their portfolio—There Is No Alternative.”

The Fund has outperformed relevant fixed income benchmarks on a 1-, 3- and 5-Year basis as of date:

Identifier

Name

1 Year

3 Year

5 Year

Since First Investment

Since Inception

RCIIX

Credit Income Fund

-1.64 %

5.58 %

5.32 %

7.02 %

6.48 %

LBUSTRUU

Barclays US Aggregate Index

-15.68 %

-3.77 %

-0.54 %

0.27 %

0.20 %

SPBDAL

Morningstar /LSTA Leveraged Loan Index

-1.78 %

2.71 %

3.07 %

3.82 %

3.35 %

*YTD through 10/31/2022
**Data represents performance as of the date the Fund started actively investing as of 10/27/2015.
***Inception date of the Fund is 4/17/2015.
The Bloomberg Barclays U.S. Aggregate Index is a broad-based flagship benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market. The index includes Treasuries, government-related and corporate securities, MBS (agency fixed-rate and hybrid ARM pass-throughs), ABS, and CMBS (agency and non-agency).
The S&P/LSTA Levered Loan Total Return Index is a market-value-weighted index designed to measure the performance of the U.S. leveraged loan market based upon market weightings, spreads, and interest payments.

About the Advisor

Sierra Crest is an affiliate of BC Partners Advisors L.P. (“BC Partners”), which has an over 30-year history investing across Europe and North America and has approximately $60 billion in assets under management in private equity, private credit and real estate strategies. BC Partners operates a private equity investment platform, a credit investment platform (“BCP Credit”) and a real estate investment platform as fully integrated businesses. Sierra Crest’s investment activity takes place within the BCP Credit platform. Integration with the broader BC Partners platform allows BCP Credit to leverage a team of investment professionals across its private equity platform including its operations team. BC Partners has remained an independent partnership since its early days as a pan European private equity manager. Its entrepreneurial spirit is ingrained in the culture of its organization and evident across its three complementary and integrated businesses.

Media Inquiries
Simren Priestly, Head of Communications
E: simren.priestley@bcpartners.com
T: +44 20 7009 4722

Appendix

You cannot invest directly in an index. Performance data quoted represents past performance. Past performance does not guarantee future results and investment returns and principal value of the Fund will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be higher or lower than the performance data quoted above. For performance information current to the most recent month-end, please call toll-free (833) 404-4103 or visit www.AltCIF.com.

Total Return measures net investment income and capital gain or loss from portfolio investments. All performance shown assumes reinvestment of dividends and capital gains distributions. The Total Annual Fund Operating Expense as disclosed in the prospectus dated December 16, 2020: RCIAX (4.64%), RCICX (5.39%), RCIIX (4.38%), RCIWX (4.38%), RCILX (4.90%). The Advisers have contractually agreed to defer the collection of fees and/or reimburse expenses, but only to the extent necessary to limit Total Annual Fund Operating Expenses (excluding interest, dividend expense, amortization/accretion on securities sold short, brokerage commissions, acquired fund fees and expenses and extraordinary expenses) to 2.59% (RCIAX), 3.34% (RCICX), 2.34% (RCIIX), 2.59% (RCIWX), and 2.84% (RCILX) of the average daily net assets of the funds through October 31, 2022.

The Fund is distributed by ALPS Distributors, Inc. (ALPS Distributors, Inc. 1290 Broadway, Suite 1000, Denver, CO 80203). Sierra Crest Investment Management LLC (the Fund’s investment adviser), its affiliates, ALPS Distributors, Inc., and U.S. Bank, N.A. are not affiliated.

Investing involves risk. Investment return and principal value of an investment will fluctuate, and an investor’s shares, when redeemed, may be worth more or less than their original cost. Alternative investment funds, ETFs, interval funds, and closed-end funds are subject to management and other expenses, which will be indirectly paid by the Fund. Debt instruments are subject to credit risk and interest rate risk and may be subordinated to more senior debt instruments. BDCs often use leverage to enhance returns and are subject to interest rate risk, credit risk, and liquidity risk. CLOs are debt instruments but also carry additional risks related to the complexity and leverage inherent in the CLO structure. The use of leverage, such as borrowing money to purchase securities, will cause the Fund to incur additional expenses and magnify the Fund’s gains or losses.

There currently is no secondary market for the Fund’s shares and the Fund expects that no secondary market will develop. Shares of the Fund will not be listed on any securities exchange, which makes them inherently illiquid. An investment in the Fund’s shares is not suitable for investors who cannot tolerate risk of loss or who require liquidity, other than the liquidity provided through the Fund’s repurchase policy. Limited liquidity is provided to shareholders only through the Fund’s quarterly repurchase offers, regardless of how the Fund performs. The Fund’s distributions policy may, under certain circumstances, have certain adverse consequences to the Fund and its shareholders because it may result in a return of capital, resulting in less of a shareholder’s assets being invested in the Fund, and, over time, increase the Fund’s expense ratio. Any invested capital that is returned to the shareholder will be reduced by the Fund’s fees and expenses, as well as the applicable sales load. Investments in lesser-known, small and medium capitalization companies may be more vulnerable than larger, more established organizations. The sales of securities to fund repurchases could reduce the market price of those securities, which in turn would reduce the Fund’s NAV.

1 Source: Bloomberg returns 1/2/2020 through 1/1/2022; Alternative Credit Income Fund (RCIIX), total return +19.65%; U.S. Aggregate Bond Index (LBUSTRUU), total return -15.98%; Morningstar/LSTA Levered Loan Total Return Index, total return +6.68% (SPBDAL); U.S. High Yield Returns as measured by Bank of America U.S. High Yield Index (H0A0), total return -2.51%;
2 Source: Morningstar 11/1/2020 through 10/31/2022 Cumulative Return as follows: Alternative Credit Income I (+19.78%); PIMCO Flexible Credit Income Inst (+2.99%) Cliffwater Corporate Lending I (+19.12%); CION Ares Diversified Credit I (+13.11%); PIMCO Flexible Municipal Income Ins (-10.73%); First Eagle Credit Opportunities I (+10.70%);  Lord Abbett Credit Opportunities Instl (+14.70%); Apollo Diversified Credit I (+2.90%);  Carlyle Tactical Private Credit I (+13.99%); Invesco Senior Loan Y (+9.86%); FS Credit Income I (+4.93%);  Blackstone Floating Rate Enhanced Inc I (+2.60%); KKR Credit Opportunities I (-3.02%); BlackRock Credit Strategies Instl (-2.55%); Palmer Square Opportunistic Income (+5.62%) and Ecofin Tax-Advantaged Scl Impct Instl (+5.42%).
3 Source: Morningstar 11/2/2020 through 10/31/2022, arithmetic Sharpe Ratio of 3.53

 

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