Canada's Ninepoint halts cash payouts on three credit funds
Canadian investment manager Ninepoint Partners LP is temporarily suspending cash distributions in three of its private credit funds.
Unitholders of funds with about $2 billion of assets won’t be able to receive cash payouts, in order to preserve the funds’ liquidity. The firm will revisit its decision in the third quarter.
“After reviewing our various liquidity options, Ninepoint Partners and our subadvisors have determined that the best path forward to preserve liquidity and balance the long-term goals of these three affected funds is to redirect future distribution into additional units rather than cash distributions starting July 1,” an outside spokesperson for the firm said in an emailed statement.
The affected funds are the Ninepoint-TEC Private Credit Fund II, the Ninepoint Alternative Income Fund and the Ninepoint Canadian Senior Debt Fund.
The Toronto-based firm, which oversees about $7 billion of assets, is not winding down these funds, according to the statement. “Investors will continue to have access to the ongoing benefits of being invested in private credit as we remain focused on ensuring the sustained performance and stability of our current portfolio.”
The largest of the funds is Ninepoint-TEC, which reported $1.2 billion on assets at the end of 2023. It makes asset-backed loans to companies that “may have difficulty obtaining financing from other sources” — and some borrowers have the option of paying interest as payment-in-kind rather than cash, according to fund documents.
The Ninepoint Alternative Income Fund, which is around $600 million, has the bulk of its loans to middle-market companies in the United States and Canada. It normally targets payouts to investors of 10 per cent to 12 per cent of the
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