Vida Insurance Credit Opportunity Fund Iii Lp

Vida Insurance Credit Opportunity Fund III LP: Overview

Vida Insurance Credit Opportunity Fund III LP (VICOF III) is a private investment fund that primarily invests in North American senior secured loans. The fund was launched in 2018 by Vida Capital, a leading alternative investment firm that specializes in insurance-linked securities and other structured finance products.

VICOF III is a closed-end fund that has a target size of $750 million. The fund provides institutional investors with access to a diversified portfolio of senior secured loans across various sectors and industries. The objective of the fund is to generate current income and capital appreciation by investing in loans that are often overlooked by traditional lenders.

VICOF III targets loans that are backed by strong collateral or have other structural protections that mitigate credit risk. The fund invests in loans that have a credit rating of BB+ or lower, which typically offer higher yields compared to investment-grade loans. The fund also invests in loans that are issued by companies that have a strong market position, stable cash flows, and experienced management teams.

VICOF III’s investment strategy is primarily focused on the primary market, where the fund can negotiate favorable terms and conditions with borrowers. However, the fund also invests in the secondary market, where it can acquire loans at a discount to their par value.

VICOF III is managed by Vida Capital’s Credit team, which has a track record of investing in senior secured loans for over a decade. The team consists of experienced professionals who have extensive knowledge of the credit markets and the ability to identify attractive investment opportunities.

Investment Process

VICOF III’s investment process is rigorous and systematic, and involves the following steps:

1. Screening and Analysis: The credit team screens potential investments based on various factors, including credit quality, sector and industry trends, and macroeconomic conditions. The team also conducts extensive due diligence, including financial analysis, industry research, and management interviews, to assess the creditworthiness of potential borrowers.

2. Structuring and Negotiation: Once a potential investment is identified, the credit team structures the loan to include favorable terms and conditions that mitigate credit risk. The team also negotiates with the borrower to obtain the best possible terms for the fund.

3. Portfolio Management: The credit team actively manages the portfolio to ensure that investments meet the fund’s investment objectives. This includes monitoring credit quality, assessing market conditions, and optimizing the portfolio’s risk-return profile.

Performance and Returns

VICOF III has a target net return of 7% to 9% per annum, which includes an income component of 5% to 6% and a capital appreciation component of 2% to 3%. The fund has a minimum investment size of $1 million and a lock-up period of five years.

Since its inception, VICOF III has delivered strong returns to its investors. As of June 30, 2021, the fund has generated a net return of 8.1% per annum, exceeding its target net return. The fund has also distributed over $60 million in income to its investors.

Conclusion

VICOF III offers institutional investors a unique opportunity to invest in a diversified portfolio of North American senior secured loans. The fund’s investment strategy is focused on generating current income and capital appreciation by investing in loans that are often overlooked by traditional lenders. The fund is managed by an experienced credit team that has a track record of delivering strong returns to its investors. With its target net return of 7% to 9% per annum, VICOF III is a compelling investment option for institutional investors who are seeking attractive risk-adjusted returns.