LIQID Expands ELTIF Offering: Private Debt via Ares European Strategic Income Fund

Two days ago, we analyzed the new LIQID Infrastructure ELTIF – today, part 2: LIQID has simultaneously launched a Private Debt share class as part of the Ares European Strategic Income Fund.

The Structure

Unlike the Infrastructure product, LIQID hasn't created its own fund wrapper here, but instead offers access to a dedicated share class of the Ares ELTIF, which with assets under management of EUR 5.46 billion is one of Europe's largest Private Debt vehicles. The product focuses on senior secured loans to UK and European mid-market companies with 70-80% allocation in directly originated loans.

Performance & Key Facts

• Total net return since inception: 10.1% p.a.
• 96% of loans are senior secured (highest repayment priority in case of insolvency)
• Ongoing distributions: 8.5% p.a.
• Risk class: 3/7
• Recommended holding period: 4 years
• Portfolio: 335 companies

Cost Structure

The management fee is 1.90% p.a., plus ongoing costs. The performance fee structure is interesting: 12.50% profit participation on net gains – but only after a preferred return of 5% p.a. for investors. This means: At least 87.50% of all profits above the 5% threshold flow to investors.

The annual total cost burden for a 4-year holding period is 3.8% according to the PRIIPs KID – above the Private Debt ELTIF average of 2.7% (analysis based on 12 funds, including both retail and institutional share classes). However, the fund also demonstrates above-average performance with a total net return of 10.1% p.a. since inception – a classic example of "you get what you pay for" in actively managed Private Credit strategies.