The PE bond structure allows exposure to private equity, by reducing the traditional hurdles that investors face when trying to access this asset class:

• Allows for smaller minimum investment sums
  Private equity investments typically require large amounts of initial capital outlay. PE bonds require much smaller initial capital outlays
  
  
• Shorter holding periods
  Private equity investments typically have long holding periods of about 10 years. PE bonds have much shorter terms of 3 to 5 years
  
  
• No J-curve
  PE investors must be comfortable with the J-curve effect, which exposes them to negative cash flows in the initial years. PE Bonds behave like normal bonds and do not experience the J-curve effect
  
  
• Access to fund managers
  It is typically difficult to gain access to reputable fund managers. Astrea’s PE bonds are backed by portfolios of PE funds managed by reputable fund managers
  
  
• Liquidity
  Buying and selling PE interests take several months and require brokers to be involved. PE Bonds are listed, allowing trading of the investments to be done easily

For more information on private equity and the traditional barriers to entry of this asset class, please refer to our primer on private equity.

The information regarding private equity bonds has been derived from general information which is publicly available as well as generic structural information from previous issues of Astrea private equity bonds which is also publicly available. The information is included for information purposes only and has not been independently verified by Azalea and its affiliates and should not be regarded as an indication of the future performance or results of the fund investments, or private equity bonds or the private equity industry generally.