Investment Team: The people and work behind the numbers

The investment team at Pactum have a proud record: with over ten years of fund management track record behind them, no investor has ever taken a loss over any 12-month period. Please get to know Rick, Derek, Mike, and Margaret.

As we launch our new flagship Pactum Corporate Capital Fund, it is worth considering the effort to build such a consistent result.

Firstly, it is down to the team’s consistency. Our CIO, Rick Pearson and our Head of Operations, Derek Palmer, started working together 13 years ago, and the two of them first worked with our Deputy CIO, Mike Johnson, over ten years ago. This has given them plenty of time to build a working rapport that plays to everyone’s strengths and covers each other’s weaknesses.

Secondly, the team was specifically built to be complementary. While Rick remains the architect of our innovative product offerings, Mike is our regulatory specialist who handles all the client onboarding and day-to-day management of our fund and ensures all the due diligence and regulatory reporting are completed to the highest possible standard. This is a full-time job because Pactum is regulated by FINMA in Switzerland and Pactum Securities (PacSec) by the CSSF in Luxembourg.

Derek takes responsibility for managing all the underlying portfolios and liaison with the insurance companies to ensure that our investors always have complete credit protection. He also supervises all operations at PacSec, where we offer securitisation as a service from our own Luxembourg SPV (Special Purpose Vehicle) structure. Clearly, Derek and his team’s work is only beginning when the rest of the investment team responsible for the design and issuance are celebrating the launch of a new facility!

On the legal side, Margaret Sears has rapidly become one of the most knowledgeable structuring lawyers in Europe: supporting Rick after he launched the first-ever securitisation of insured receivables under the new European Securitisation act and leading the project which will shortly issue the first public Sukuk issuance backed by receivables.

Success factors of Pactum’s Investment team

The attitude of the team that just because something has never been done, there is no reason it cannot be, allows Pactum to offer our clients the absolute best solution to their funding needs. Similarly, it will enable investors in various jurisdictions to access products and exposures they otherwise would not be able to. We passionately believe that no other team in Europe can compete with the Pactum investment team for flexibility in the design of facilities.

In addition to his role as CIO, Rick is responsible for the house view on economics to ensure the fund and our products are best protected against macro movements in the Global markets. In return for access to their teams of economists and specialists, he continues to advise a £7+ billion UK pension fund from the point of view of someone with over 30 years of experience in the markets and specifically the actions of Central Banks/ movements of interest rates. This is the sector where his original fund management reputation was built while managing his own hedge fund with as much as Euro 15 billion of exposure.

So how does the process of a Pactum investment work? An initial discussion with the potential client will usually result in Rick designing a suitable solution and the team being engaged alongside external counsel to compile the required documentation. Meanwhile, an onsite Due Diligence visit will take place to back up the comprehensive onboarding process that Mike will conduct, including understanding the client’s financial history and that of their receivables. Contracts will be checked for any offset or dilution provisions, and then all of the client’s debtors will be checked for insurability with an appropriate insurer. The client’s collections/ dunning policy will be inspected. Then a specialist compartment will be opened with our Pactum Securities division to issue notes to both our fund and external investors and the true-sale purchase of the receivables. The “true sale” is backed by the appropriate legal opinions.

The resulting note facility offers clients a secure form of funding and investors a fixed-income type product ideal for Treasury books or safe-haven investment in these choppy markets. Hopefully, at the end of the day, all participants are happy, in which case the Investment Team’s job is done.