Deep local presence to drive deal origination
UOC’s management team sources directly for deals in local markets. Its capabilities to create proprietary investment opportunities are also backed by UOB’s extensive network in Asia Pacific.
Proven strategy to tap on the attractive but under-served demand for mezzanine financing
To meet their growth objectives, companies in Asia are expected to have continued demand for capital raising, particularly financing with shorter tenures (typically less than three years) than private equity investment as well as that with less equity dilution. While this demand is largely under-served, UOC’s management team recognises the merits of a lower risk profile given the shorter exposure, high exit visibility and structural downside protection for such opportunities.
UOC’s mezzanine strategy minimises equity dilution and offers tailored solutions including matching tenures to cater to the needs of investees.
Strong structuring capabilities to provide tailored investment approaches
UOC’s management team has is experienced in developing innovative solutions through structuring that address the issues at hand and generate additional value for the investors.
Unique value add to investees through extensive networks
Backed by UOB’s and ORIX’s extensive networks and relationships across Asia, UOC assists investee companies to identify new customers to drive business growth as well as new suppliers to lower operating costs. This also allows investee companies to diversify their customer and supplier base.
Through UOB and ORIX, UOC’s appeal to investee companies also lies in the opportunities to identify joint venture partners to gain access to new markets, technology, branding and other resources.
Investee companies may also benefit from greater market credibility with UOB, a leading banking in Asia, being one of their shareholders.
The UOC Fund targets investments with mezzanine characteristics i.e. with lower risk spectrums. With an emphasis on capital protection, the Fund provides downside protection typically through security arrangement and stringent selection of deal types.
Faster return of capital
Investors can look forward to more consistent and timely return of capital through principal amortisation and interest coupons. Further, the UOC Fund has a relatively short tenure of 4+3 years with one year option.
Reduced exit risk
The UOC Fund, through mezzanine investments, reduces the reliance on liquidity events or major debt refinancing return of capital due to amortisation prior to final maturity. The debt component will typically be repaid by the issuer upon maturity while the equity return component typically carries a put option. This allows for full exit from the investments.
More consistent returns through the investment cycle (lower J-curve effect)
The UOC Fund aims to provide significant current income during the tenure of the investments to provide more consistent returns.
As most mezzanine investments comprise principally debt instruments, valuations are more stable as they do not normally fluctuate in value compared with equity instruments.