Direct Lending

Our Direct Lending strategy provides investors with a managed investment approach to credit trades.

Banner provides financing solutions to areas of the market that are underserviced by traditional lenders. Our team is often self-originating, providing detailed structuring expertise across the capital stack establishing separately managed accounts that benefit sponsors, stakeholders and institutional and HNWI’s seeking specifically tailored investment outcomes.

As a value-orientated manager, we analyse each investment on its individual merits so as to minimise downside risk, protecting invested capital while generating appropriate risk-adjusted returns. Having long standing relationships with investors allows Banner to match investor profile to investment outcomes, delivering a managed account solution specifically balanced with investor yield and risk requirements.

Banner leads each Direct Lending transaction in which it invests. We will also take an active role across project group meetings and ongoing trade management and depending on trade term, we may seek active board representation. This further ensures that each capital investment complies with our underlying strategy and that each trade is managed in a manner consistent with our objective of preserving invested capital whilst seeking an appropriate risk adjusted return.

Senior Credit

The Senior Credit team specialises in debt-driven investments across four core areas of focus: Commercial Real Estate, Residential Real Estate, Land Subdivisions and Retail Real Estate.

Consistent with our investment philosophy, Banner seeks to provide a fixed income return with potential for outperformance by making investments based on credit fundamentals without sacrificing the quality of its investment analysis to chase yield.

Our approach adheres to Banner’s investment philosophy of risk control and minimising downside, applying stringent valuation and credit criteria before considering the yield relating to a prospective security. The Senior Credit team collaborates closely with a network of quality partners throughout its research and investment selection process. After the sponsors and the security have been assessed on credit fundamentals, our analysts work closely with our Investment Committee to price the issue, re-examining those fundamentals and the relative value of any like securities and the surrounding market conditions.

Credit quality and management of downside risk form the basis of appropriate risk adjusted returns and yield spreads.

Real Estate Private Equity

Banner’s Real Estate Private Equity team focuses on assets that have been undermanaged or need repositioning in their current market. Separately managed accounts provide investors with direct, often off market trades, involving properties that are owned by commercial and retail real estate sponsors and operators.

Having a depth of experience across asset classes allows the PE team to pursue a range of investment opportunities. The team also pursues real estate development opportunities with sponsors who are aligned and established in terms of deliverables. Our deep knowledge of the markets in which we operate and our opportunistic approach to PE investing differentiates Banner from other real estate investors.

In focusing on real estate assets that are distressed, inefficient or require repositioning so as to value-add, we invest in a wide range of properties across markets and investment cycles. Our approach to investing utilises best-in- class independent asset valuations and a bottom-up analysis that examines both macroeconomic and localised conditions, enabling Banner to focus on investments where we hold a competitive advantage. This might be derived via existing off-market relationships, our ability to provide an outcome across debt and equity requirements or Banner’s value-add through repositioning the underlying asset and structuring a viable trade exit.

Strategic Credit

Our Strategic Credit team originates trades directly, offering subordinated debt, super-stretch senior and bridge loans to established sponsors. The Banner Strategic Credit fund has returned 12-15% since inception and is a co-mingled investment focused on originating strategic opportunities in dislocated markets and providing flexible outcomes across the sponsor’s capital stack. While seeking to lead transactions wherever possible, this fund is also able to participate in syndicated trades both within the Banner Group and through combining with complementary debt providers.

The market inefficiencies that form the basis of our investment philosophy are no more prevalent than in the Strategic Credit space. Banner has a track record of investing in this space, having completed more than a hundred trades. Our approach to Strategic Credit seeks to combine protection against downside risk with the high yields achievable through investing in this credit alternative.

Regulatory changes impacting traditional finance enables Banner to take a broad approach to investing by looking at any level of the capital stack, often taking a formerly “senior” position that may, in the current lending environment, be priced strategically at yields previously reserved for subordinated debt. We seek out-of-favour and off-market investments and focus on preserving invested capital and avoiding loss.