Unified Global Alternatives

Investments in loans are affected by changes in interest rates, the size of the market segment, the currency allocation, the economic sector, and the credit quality of the loans. Broadly syndicated loans and private credit are investments with generally lower credit quality.
 
The risk and reward profile does not reflect the risk inherent in future circumstances that differ from what loans have experienced in the recent past. This includes the following events which are rare but can have a large impact:
 
Credit risk: Issuers of assets may not pay income or repay capital when due. Loans have considerable credit risk.
 
Liquidity risk: Assets cannot necessarily be sold at limited cost in an adequately short timeframe. Loans may be prone to limited liquidity.
 
Event risk: In the case a trigger event occurs contingent capital is converted into equity or written down and thus may loose substantially in value.
 
Operational risk: Deficient processes, technical failures or catastrophic events may cause losses.
 
Political and Legal risks: Investments are exposed to changes of rules and standards applied by a specific country. This includes restrictions on currency convertibility, the imposing of taxes or controls on transactions, the limitations of property rights or other legal risks. Investments in less developed financial markets may expose the loan to increased operational, legal and political risk.
 
Sustainability risks: Sustainability risks are environmental, social or governance events or conditions can have a material negative effect on the return, depending on the relevant sector, industry and company exposure.
 
The above list is not exhaustive.