Sun | Jul 12, 2020

Sygnus Credit doubles investment portfolio

Published:Wednesday | February 19, 2020 | 12:22 AMNeville Graham/Business Reporter
Chief Investment Officer for Sygnus Capital, Jason Morris.
Chief Investment Officer for Sygnus Capital, Jason Morris.

In six months, Sygnus Credit Investments Limited has doubled its portfolio of investments, nearly half of which is deployed in Jamaica.

The company’s has made 23 private credit investments valued at US$54.35 million to the period ending December 2019.

That’s up from US$28 million deployed among 16 companies up to June 2019.

“What we’ve done in six months is that the net amount invested in that period, including those we’ve exited, was more than all of 2018; in fact what we did for Q2 exceeded all of the previous financial year,” Morris told the Financial Gleaner.

Sygnus Credit has investments in various regional markets: largely Jamaica, 44 per cent; and Cayman Islands, 27 per cent; but also the Dutch Caribbean islands of St Maarten, Saba and St Eustatius and the ABC islands of Aruba, Bonaire and Curacao; and St Lucia.

To help finance the growth in its private credit investment portfolio, Sygnus Credit raised US$15 million on the private debt market in December.

Another member of the Sygnus Capital group, the newly formed Sygnus Deneb Investments Limited, is also raising US$25 million on the debt market for its operations as a private equity investor.

The new business, which was launched last Wednesday as s a joint venture with Sagicor Investments Jamaica Limited, does not overlap with Sygnus Credit, Morris said.

“Sygnus Deneb is the third leg of our alternative investment platform doing its own capital raise in a similar way to the other leg, Sygnus Real Estate Finance,” he noted.

Sygnus Credit is the only member of the Sygnus Capital group that trades on the stock market.

The company reported half-year net profit of US$1.63 million, up 71 per cent from US$955,584 in the 2018 period.

Sygnus Credit said it improved the yield on its private credit investments from 11.8 per cent to 12.5 per cent, and that its average investment in targeted companies has moved up from US$1.75 million to US$2.36 million. At the same time the company is reporting that the weighted average term of investment has moved from 2.3 years at December 2018 to 2.9 years at December 2019.

“This is simply because the number of opportunities we had over the corresponding period was for longer maturity investments,” said Morris.

“Typically we invest for up to five years, and that can go up to seven years for infrastructural investments. In this reporting we ended up with investment maturities that were both longer and in some instances shorter which we have exited,” he said.

For the rest of the financial year Morris expects the company to finalise new deals, over which the company will be approaching the market again for more funds to execute the investments. The company’s financial year ends in June.

“We told shareholders that we’d be approaching the market for US$35 million debt or equity. We’ve raised US$15 million and at the appropriate time we’ll make an announcement about the other US$20 million,” Morris said.