Junior companies in the natural resources sector can provide outstanding returns when they can access the capital required to liberate value. Lack of access to institutional investors at this end of the market constrains capital availability. Also, for institutional investors, it can be challenging to deploy equity capital to junior companies due to their size and stage of development.
Paternoster can solve this challenge by providing an investment company for investors that can scale and offer credit-backed exposure to the junior sector. Paternoster is focused on filling this funding gap and, with more limited funding competition in this part of the market, opportunities to achieve attractive returns are available.
Paternoster has developed a sophisticated understanding of the natural resources sector through its equity investing and is now evolving that strategy to reduce volatility and to generate income, in addition to capital growth.
Paternoster will seek to secure superior downside protection compared to equity investing by focusing on investing in companies using convertible, mezzanine, senior debt, and royalty/long term income instruments.
The principal focus will be on investments of US$3 million to 10 million on a syndicated basis.
Cash interest, fees, trading profits and other income streams earned will form the basis of dividend distributions to shareholders.
Whilst the current investment focus is on the natural resources sector this may be expanded to include additional growth sectors where the appropriate returns can be achieved
Paternoster has recently entered into an agreement with RiverFort Global Capital Ltd ("RiverFort"), the specialist provider of financing to the natural resources sector, whereby Paternoster will work closely with and co-invest alongside RiverFort in a range of opportunities within the natural resources sector.