Income with value upside: Royalty businesses have been listed in North America since the 1980s and have been proven over market cycles to provide both income and capital gains to public shareholders due to the long-term predictable cash flows they deliver.
Resilient business model: The pandemic proved Duke’s resiliency. Duke Royalty has continued to deliver robust cash revenues and protection against downside for both investors and royalty partners despite the extraordinary conditions posed by the virus. In North America where royalty finance represents a £50 billion sector, royalty businesses have been proven to withstand economic cycles.
Diversified portfolio: Duke’s portfolio consists of an array of companies operating across a range of sectors. In addition, a significant number of its portfolio companies have acquisition opportunities which may result in follow-on financing from Duke, thereby mitigating the challenges faced by other SMEs.
Rising demand: Royalty finance has many attractive qualities in comparison to other funding solutions given its long-term, supportive and revenue-linked nature. Banks unwillingness to lend to SMEs has been increasing ever since the GFC and the pandemic has prompted many mature, profitable businesses to take on unsustainable levels of debt. Demand for more flexible, alternative sources of capital has been very strong in recent years and as a first mover and leader in the UK and European corporate royalty space, Duke has a significant opportunity to build and further diversify its portfolio.
Access to capital: Duke’s debt facility with highly reputable UK-based lender Pollen Street Capital enables it to complete multiple investments before having to raise additional equity in the public markets, while enabling current investors to achieve greater returns.
Experienced management: Duke’s management team and investment committee has more than 75 years of direct royalty investing experience and includes deal originators with deep local relationships as well as pioneers in the global royalty industry.